FINC 3115 – A stock has an expected return of 12.38 percent.
June 7th, 2024
1. A stock has an expected return of 12.38 percent. The beta of the stock is 1.4 and the risk-free rate is 5 percent. What is the market risk premium? (Answer in a percentage, but do not include the % sign and round to two decimal places, i.e., 18.35)2. Assume that the risk-free rate is 4 percent, and that the market risk premium is 5.0 percent. If a stock has a required rate of return of 14.5 percent, what is its beta? Round it to two decimal places, i.e.,1.25