6. You currently own a technology stock that has an expected return of 14.9% and its beta is 1.44. The expected return on the overall stock

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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6. You currently own a technology
stock that has an expected return of
14.9% and its beta is 1.44. The
expected return on the overall stock
market is 11.60%. The inflation rate is
currently 2.00%. Using the CAPM,
what is the risk-free rate? Show all
your work.
Transcribed Image Text:6. You currently own a technology stock that has an expected return of 14.9% and its beta is 1.44. The expected return on the overall stock market is 11.60%. The inflation rate is currently 2.00%. Using the CAPM, what is the risk-free rate? Show all your work.
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