Question: (Capital asset pricing model) Using the CAPM, estimate the appropriate required rate of return for the three stocks listed here, given that the risk-free rate
(Capital asset pricing model)
Using the CAPM, estimate the appropriate required rate of return for the three stocks listed here, given that the risk-free rate is 6
percent and the expected return for the market is 17 percent.
| STOCK | BETA |
| |
| A | 0.75 | ||
| B | 0.94 | ||
| C | 1.31 | ||
| (Click on the icon located on the top-right corner of the data table above in order to copy its contents into a spreadsheet.) | |||
a. Using the CAPM, the required rate of return for stock A is ______%. (Round to two decimal places.)
b. Using the CAPM, the required rate of return for stock B is _____%. (Round to two decimal places.)
c. Using the CAPM, the required rate of return for stock C is ______%. (Round to two decimal places.)
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