Determining the risk-free rate
Problem:
A stock has an expected return of 15 percent, its beta is 1.25, and the expected return on the market is 13 percent.
Required:
Question: What must the risk-free rate be?
Note: Please show how you came up with the solution.
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Question: What must the risk-free rate be? Note: Please show how you came up with the solution.
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