Expected return on the market


Problem:

A stock has an expected return of 9 percent, its beta is 0.6, and the risk-free rate is 4.95 percent.

Required:

Question: What must the expected return on the market be?

  • 12.28%
  • 12.17%
  • 11.11%
  • 11.70%
  • 6.75%

Note: Explain all calculation and formulas.

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Accounting Basics: Expected return on the market
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