Question: Last year, Rocket Inc. earned a 20% return. Farmer's Corp. earned 10%. The overall market return last year was 17%, and the risk-free rate was

Last year, Rocket Inc. earned a 20% return. Farmer's Corp. earned 10%. The overall market return last year was 17%, and the risk-free rate was 3%. If Rocket stock has a beta of 1.8 and Farmer's has a beta of 0.4, which stock performed better once you take risk into account?

Rocket's expected return is ____%

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!