Question: The table below shows information for 3 stocks. Security Beta Stock 1 1.2 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 | 1.2 |
| Stock 2 | 1.2 |
| Stock 3 | 0.2 |
The risk-free rate is 4.5% and the required return for the market portfolio is 10%. Calculate the required return for each stock, using the Capital Asset Pricing Model (CAPM).
Part 1
What is the required return for stock 1?
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Part 2
What is the required return for stock 2?
Submit
Part 3
What is the required return for stock 3?
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