A stock's beta equals 1.34. If the risk-free rate is 1.3% and the market risk premium is 5.9%, what return should be required on this stock if theCAPM model holds?O 8.41%O 9.21%O 7.48%O 10.04%Onone of these

CAPM is capital assets pricing model that is used to calculate the required rate based on risk…

Answered: 8.41% 9.21% 7.48% 10.04% none of these

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8.41% 9.21% 7.48% 10.04% none of these

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

Section: Chapter Questions

Problem 1PS

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Question

A stock's beta equals 1.34. If the risk-free rate is 1.3% and the market risk premium is 5.9%, what return should be required on this stock if the
CAPM model holds?
O 8.41%
O 9.21%
O 7.48%
O 10.04%
Onone of these

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