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How to calculate beta and required rate of return for following problem?
Suppose rRF (rate of return on a risk free security) = 5%,
rM (return for “the market”)= 14%, and
rA = 12%
a.Calculate stock A’s beta
b.If stock A’s beta were 2.0, what would be A’s new required rate of return?
2 Answers
- PhilLv 41 decade agoFavorite Answer
CAPM
Plug 'em in, and win!
Required rate
of return on = Riskfree rate + [ Beta of investment ( Market return - Riskfree rate)]
an investment
(RoR)
- Anonymous6 years ago
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RE:
How to calculate beta and required rate of return for following problem?
Suppose rRF (rate of return on a risk free security) = 5%,
rM (return for “the market”)= 14%, and
rA = 12%
a.Calculate stock A’s beta
b.If stock A’s beta were 2.0, what would be A’s new required rate of return?
Source(s): calculate beta required rate return problem: https://tr.im/G3L8r