Required Rate of Return Stock R has a beta of 1.4, Stock S has a beta of 0.45, the expected rate of return on an average stock is 11%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places.
Required Rate of Return Stock R has a beta of 1.4, Stock S has a beta of 0.45, the expected rate of return on an average stock is 11%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places.
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
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Stock R has a beta of 1.4, Stock S has a beta of 0.45, the expected rate of return on an average stock is 11%, and the risk-free rate is 7%. By how much does the required return on the riskier stock exceed that on the less risky stock? Do not round intermediate calculations. Round your answer to two decimal places.
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