Please give me true answer this financial accounting question The risk-free rate of return is currently 5%, whereas the market riskpremium is 7%. If the beta of Lenz Inc. stock is 1.65, then what is theexpected return on Lenz?(Round the answer to 3 decimal places and present percentage as adecimal.)

Step 1: Define Expected Return Using CAPMThe Expected Return Using the Capital Asset Pricing Model…

Answered: The risk-free rate of return is…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 7P

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The risk-free rate of return is currently 5%, whereas the market risk premium is 7%. If the beta of Lenz Inc. stock is 1.65, then what is the expected return on Lenz? (Round the answer to 3 decimal places and present percentage as a decimal.)