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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