Find out the expected return on stock


A stock has a beta of 1, the expected return on the market is 10 percent, and the risk-free rate is 4.5 percent.

Required:

What must the expected return on this stock be?

  • 9.5%
  • 10.5%
  • 10%
  • 10.4%
  • 14.5%

Note: Provide support for your rationale.

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Finance Basics: Find out the expected return on stock
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