According to the website The Motley Fool (https://www.fool.com/investing/how-to-invest/stocks/average-stock-market-return/), the 10-year, 30-year, and 50-year average annualized stock market returns were as follows:

       

   10 years (2012-2021)   14.8%

   30 years (1992-2021)     9.9%

   50 years (1972-2021)     9.4%

 

Assuming that (i) the risk-free rate is 3% regardless of the length of the time period and (ii) the beta estimated by Yahoo Finance for Apple is correct. Using the capital asset price (CAPM) model, complete the table below for the expected return on equity:   

10-year return on equity estimate
30-year return on equity estimate
50-year return on equity estimate

Answer rating: 100% (QA)

To calculate the expected return on equity using the capital asset pricing model CAPM we need the ri... View the full answer