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5 February, 00:21

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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  1. 5 February, 03:49
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    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
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