Risk and return is a classic item in finance you would like


Risk and return is a classic item in finance. You would like to estimate what the return on General Electric stock could be given its beta of 1.68. Other data you have collected: the rate of return on 90-day T-Bills is 2%, on 5 year T-Notes is 3%, and on the "long bond", the 30-year T-Bond = 5.5%. The Prime is 7%, LIBOR is 6.5%, and the average return on the overall stock market is estimated to be 12%. Ok, again, what do you expect the rate of return on GE's stock to be? (Hint: note that term :"bet" there's a classic formula that uses "beta".

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Financial Management: Risk and return is a classic item in finance you would like
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