question archive The risk premium is % on stock C given the following information: risk-free rate = 4%, market return = 15%, stock C's beta = 1
The risk premium is % on stock C given the following information: risk-free rate = 4%, market return = 15%, stock C's beta = 1
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The risk premium is % on stock C given the following information: risk-free rate = 4%, market return = 15%, stock C's beta = 1.15.
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Answer:
Calculation of the risk premium on stock C:
Risk premium on stock C = Beta of stock x ( Market return - Risk free rate)
= 1.15 x (15% -11%)
= 1.15 x 11%
= 12.65% (Answer)
