Question
Bozo finds the following information online: the 10-year US treasury note is yielding 3.8%, and the beta of the stock he is following, Clown Co.
Bozo finds the following information online: the 10-year US treasury note is yielding 3.8%, and the beta of the stock he is following, Clown Co. (CC) is 2.0. The required return for CC is 18%. What is the expected return of the market? If the Federal Reserve raises the 10-year notes to 4.5%, what would the new expected return be for CC?
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