Problem:
The risk-free rate of return is 4.4 percent and the market risk premium is 14 percent.
Task:
Question: What is the expected rate of return on a stock with a beta of 1.6?
- 22.40 percent
- 26.80 percent
- 21.04 percent
- 10.52 percent
- 13.40 percent
Note: Show all workings.