Question: The table below shows information for 3 stocks. Security Beta Stock 1 1.9 Stock 2 1.2 Stock 3 0.2 The risk-free rate is 4.5% and

The table below shows information for 3 stocks.

Security Beta
Stock 1 1.9
Stock 2 1.2
Stock 3 0.2

The risk-free rate is 4.5% and the required return for the market portfolio is 7%. Calculate the required return for each stock, using the Capital Asset Pricing Model (CAPM).

Part 1

What is the required return for stock 1? (3+ decimals)

Part 2

What is the required return for stock 2? (3+ decimals)

.

Part 3

What is the required return for stock 3? (3+ decimals)

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