question archive Stock A has a risk premium of 6
Stock A has a risk premium of 6
Subject:FinancePrice:2.86 Bought3
Stock A has a risk premium of 6.3 percent. If Treasury bills yield 1.7 percent and the expected return on the market is 9.4 percent, what is the stocks beta coefficient? Hound your answer to two decimal places.
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The CAPM formula is given as
Re = rf + beta x (Rm - rf) = 9.4 = 1.7 + beta x 6.3
Beta = 1.22
