If the expected return on the market is 8% and the risk for your rate is 4%. What is the expected return for a stock with a beta equal to 2.00
If the expected return on the market is 8% and the risk for your rate is 4%. What is the expected return for a stock with a beta equal to 2.00
Holt Mcdougal Larson Pre-algebra: Student Edition 2012
1st Edition
ISBN:9780547587776
Author:HOLT MCDOUGAL
Publisher:HOLT MCDOUGAL
Chapter7: Percents
Section7.7: Simple And Compound Interest
Problem 2E
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If the expected return on the market is 8% and the risk for your rate is 4%. What is the expected return for a stock with a beta equal to 2.00? 
Expert Solution
Step 1
Given :
Expected return on market (rm) = 8%
Risk for your rate (rf)= 4%
Beta = 2.00
Expected return for a stock(R) =?
Formula :
R = rf + beta*( rm - rf )
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Solved in 2 steps
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