Suppose that Ford's stock volatility (i.e. standard deviation) is 40% while the market volatility is 20%. If the correlation between Ford and the market is 0.8, what is the expected return on Ford's stock? Assume that the expected return on the market is 12% and the risk-free rate is 4%

Answer rating: 100% (QA)

We can calculate the expected return on Fords stock using the Capital Asset Pricing Model CAPM CAPM ... View the full answer