Question: A stock has a CAPM-implied expected return of 9%. If the risk-free rate is 1.4% and the market risk premium is 11.8%, what is the
A stock has a CAPM-implied expected return of 9%. If the risk-free rate is 1.4% and the market risk premium is 11.8%, what is the beta of the stock?
Algebraically rearrange the following CAPM formula to solve for beta: (See Attached Image)
Capital Asset Pricing Model Components rf The risk-free rate. (4-week Treasury Bill rate of return) The amount of systematic risk being evaluated. kM The expected return on the market. (S\&P 500 Index rate of return)
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