Q6 If the expected return on a stock is 6 percent. Risk free rate of return is 2 per cent andmarket return is 7 percent. What must be theBeta?If the value of expected return Ahli Bank 7 percent, if Beta is 1.6 and market return is 8 percent. What must be the risk free rate?If the expected return on a stock is 7.5 percent, if the beta is 0.4 and risk free rate ofreturn is 4 per cent. What must be the returnon the market?

Capital asset pricing model (CAPM) formula: Expected return = Risk free rate + (Beta *(Market rate -…

Answered: If the expected return on a stock is 6…

If the expected return on a stock is 6 per cent. Risk free rate of return is 2 per cent and market return is 7 percent. What must be the Beta?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 14P

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Question

If the expected return on a stock is 6 per
cent. Risk free rate of return is 2 per cent and
market return is 7 percent. What must be the
Beta?
If the value of expected return Ahli Bank 7 per
cent, if Beta is 1.6 and market return is 8 per
cent. What must be the risk free rate?
If the expected return on a stock is 7.5 per
cent, if the beta is 0.4 and risk free rate of
return is 4 per cent. What must be the return
on the market?

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