Investments
Investments
11th Edition
ISBN: 9781259277177
Author: Zvi Bodie Professor, Alex Kane, Alan J. Marcus Professor
Publisher: McGraw-Hill Education
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Chapter 9, Problem 6PS
Summary Introduction

Adequate information:

Beta of the stock: 1

Expected market return: 15%

To determine whether:

Expected return of the stock is 15% or more than 15% or cannot be determined without the risk free rate

Introduction:

Expected return of the stock is given by:

Expected return = Risk free rate + Beta of the security (Market return- Risk free rate)

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