The risk-free rate is 3% and you believe that the S&P 500s excess return will be 10%

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The risk-free rate is 3% and you believe that the S&P 500’s excess return will be 10% over the next year. If you invest in a stock with a beta of 1.2 (and a standard deviation of 30%), what is your best guess as to its expected return over the next year?

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Fundamentals Of Corporate Finance

ISBN: 9780135811603

5th Edition

Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford

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