Question: The required return for a stock, calculated using the CAPM, is 16%. The market return is 13% and the beta of the stock is 1.40.

  1. The required return for a stock, calculated using the CAPM, is 16%. The market return is 13% and the beta of the stock is 1.40. Calculate the implied risk-free rate.

    7.50%

    8.67%

    5.50%

    13.50%

    4.50%

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