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- Suppose that the risk-free rate is 5% and that the market risk premium is 7%. What is the required return on (1) the market, (2) a stock with a beta of 1.0, and (3) a stock with a beta of 1.7?You have observed the following returns over time: Assume that the risk-free rate is 6% and the market risk premium is 5%. What are the betas of Stocks X and Y? What are the required rates of return on Stocks X and Y? What is the required rate of return on a portfolio consisting of 80% of Stock X and 20% of Stock Y?Assume that the risk-free rate is 3.5% andthe market risk premium is 4%. What is the required return for the overall stock market?What is the required rate of return on a stock with a beta of 0.8?
- A stock's beta is 1.8 and the market risk premium is 6.6%. If the risk-free rate is 3.1%, what is the stock's risk premium? Answer:The risk-free rate is 5.6%, the market risk premium is 8.5%, and the stock's beta is 2.27. What is the required rate of return on the stock, E(Ri)?How do you find the market risk premium and market expected return given the expected return of stock, beta, and risk free rate? Example: The expected return of a stock with a beta of 1.2 is 16.2%. Calculate the market risk premium and the market expected return, given a risk-free rate of 3%.
- The risk-free rate is 5.6%, the market risk premium is 8.5%, and the stock’s beta is 2.27. What is the required rate of return on the stock, E(Ri)? Use the CAPM equation.Beta and required rate of return A stock has a required return of 11 percent; the risk-free rate is 7 percent; and the market risk premium is 4 percent. a. What is the stock's beta?What is the beta of a stock where the expected rate of return is 14%, the market premium is 7%, and the risk free rate is 3%? a. 1.90 b. 0.95 C. 1.45 d. 1.57
- Question: A stock has an expected return of 9.7 percent, its beta is .89, and the risk-free rate is 2.9 percent. What must the expected return on the market be?A stock has an expected return of 14.3 percent, the risk-free rate is 3.2 percent, and the market risk premium is 8.1 percent. What must the beta of this stock be? O 0.88 O 0.94 O 1.08 O 1.21 O 1.37Assume a stock has a required return on equity, ?? = 12%. The risk-free rate is ?? = 5% and themarket return is ?? = 10%. Given this information, what is the beta of the stock?