Problem:
The stock of Big Joe's has a beta of 1.32 and an expected return of 11.70 percent. The risk-free rate of return is 4.2 percent.
Required:
Question: What is the expected return on the market?
- 13.04 percent
- 9.88 percent
- 6.16 percent
- 7.50 percent
- 8.56 percent
Note: Please provide equation and explain comprehensively and give step by step solution.