A stock has a beta of 86 and an expected return of 9.14 percent. If the stock's reward-to-risk ratio is 6.08 percent, what is the risk-free rate?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...
icon
Related questions
Question
A stock has a beta of 86 and an expected return of 9.14 percent. If the stock's reward-to-risk ratio is 6.08 percent, what is the risk-free rate?
Multiple Choice
3.91%
O 3.42%
O
3.61%
1.36%
3.76%
Transcribed Image Text:A stock has a beta of 86 and an expected return of 9.14 percent. If the stock's reward-to-risk ratio is 6.08 percent, what is the risk-free rate? Multiple Choice 3.91% O 3.42% O 3.61% 1.36% 3.76%
Expert Solution
steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Knowledge Booster
Investment in Stocks
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Intermediate Financial Management (MindTap Course…
Intermediate Financial Management (MindTap Course…
Finance
ISBN:
9781337395083
Author:
Eugene F. Brigham, Phillip R. Daves
Publisher:
Cengage Learning