You use the CAPM to estimate Stock Js required return at 12.5%. If the risk-free rate is 1.5% and the expected return on the market portfolio is 7.5%. What is your estimate for Stock Js beta? LO3

2.00

1.67

2.05

-1.32

Suppose Stock A has the following returns over the last five years: 12%, 9%, 13%, 6%, and 2%. What is the average annual return? LO2

8.4%

3.4%

4.4%

4.5%

Suppose you are considering buying a stock with a beta of 2. What is your required return given by the CAPM if the expected return on the market is 7.5%, the risk-free rate is 1.5%? LO3

13.5%

12.61%

9.05%

15.19%