Betas and Expected Stock Returns. You can find estimates of stock betas by logging on to finance.yahoo.com and looking at a company's profile. Try comparing the stock betas of Google (GOOG), The Home Depot (HD), Du Pont (DD), Altria Group (MO), and Caterpillar (CAT). Once you have read section 12.3, use the capital asset pricing model to estimate the expected return for each of these stocks. You will need a figure for the current Treasury bill rate. You can find this also on finance.yahoo.com by clicking on bonds-rates. Assume for your estimates a market risk premium of 7%.
Log on to www.fidelity.com and look at the list of mutual funds that are managed by Fidelity. Some of these funds, such as the Aggressive Growth Fund, appear from their names to be high-risk. Others, such as the Balanced Fund, appear to be low-risk. Pick several apparent high- and low-risk funds and then check whether their betas really do match the fund's name.