Expected return on a stock with a beta


Consider the CAPM. The risk-free rate is 7% and the expected return on the market is 26%. What is the expected return on a stock with a beta of 2.8?

a. 54.70%

b. 50.20%

c. 62.50%

d. 60.20%

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Finance Basics: Expected return on a stock with a beta
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