The risk-free rate of return is 5.2 percent and the market risk premium is 8.4 percent. what is the expected rate of return on a stock with a beta of 1.34?

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asked Jun 17, 2018 226k views

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Melad Basilius · Answer 1 · 2018-06-22T23:59:42+0000

Beta is a measure of how much riskier an asset's systematic risk is in comparison to the market. In this case, it is 1.34 times.

Thus expected return = 5.2 + 1.34(8.4)=16.456

The risk-free rate of return is 5.2 percent and the market risk premium is 8.4 percent. what is the expected rate of return on a stock with a beta of 1.34?

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