Suppose the risk-free return is 4.6% and the market portfolio has an expected return of 11.1% and a standarddeviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.73. What is its expected return?The expected return is %. (Round to two decimal places.)

We can use the Capital Asset Pricing Model (CAPM) to calculate the expected return of Johnson &…

Answered: Suppose the risk-free return is 4.6%…

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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Suppose the risk-free return is 4.6% and the market portfolio has an expected return of 11.1% and a standard deviation of 16%. Johnson & Johnson Corporation stock has a beta of 0.73. What is its expected return? The expected return is %. (Round to two decimal places.)