Answer? ? Financial accounting Consider the CAPM. The risk-free rate is 4% and the expected return onthe market is 14%. What is the beta on a stock with an expected returnof 10%?a) 0.5b) 0.6c) 0.8d) 1.2

Capital Asset Pricing Model (CAPM) ExplainedCore Concepts:1. **CAPM** is a model that describes the…

Answered: Consider the CAPM. The risk-free rate…

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter6: Risk And Return

Section: Chapter Questions

Problem 14P

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Consider the CAPM. The risk-free rate is 4% and the expected return on the market is 14%. What is the beta on a stock with an expected return of 10%? a) 0.5 b) 0.6 c) 0.8 d) 1.2