Value of the risk-free-rate


Problem:

Propose we only have the information of beta and expected return, if we know the value of the risk-free-rate, can we determine which one of the following stocks is priced higher.

Stock A : Beta 1.08, Expected Return 12.8%
Stock B : Beta 0.66, Expected Return 9.6%

Solution Preview :

Prepared by a verified Expert
Finance Basics: Value of the risk-free-rate
Reference No:- TGS02038037

Now Priced at $20 (50% Discount)

Recommended (95%)

Rated (4.7/5)