Suppose the risk-free return is 2.8% and the market portfolio has an expected return of 6.6% and
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Suppose the risk-free return is 2.8% and the market portfolio has an expected return of 6.6% and volatility (measured as standard deviation) of 14%. A stock has an 18% volatility and a correlation with the market of -0.3. Following the CAPM assumptions, calculate and explain the beta and the expected return of the stock.
Related Book For
Corporate Finance
ISBN: 9781260772388
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
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