A stock has an expected return of 11.90 percent and a beta of .85, and the expected

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A stock has an expected return of 11.90 percent and a beta of .85, and the expected return on the market is 13 percent. What must the risk-free rate be?



Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...
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Essentials Of Corporate Finance

ISBN: 9780073405131

6th Edition

Authors: Stephen A. Ross, Randolph Westerfield, Bradford D. Jordan

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