What would be the expected rate of return on that


If a common stock has a beta of 0.754, the risk-free rate is 3% per annum and the market risk premium is 5% per annum, what is the required rate of return estimated by the CAPM for the common stock? How can a portfolio with the same beta be constructed if the portfolio invests only in the risk-free asset and an ETF that replicates the market portfolio? What would be the expected rate of return on that portfolio?

Request for Solution File

Ask an Expert for Answer!!
Financial Management: What would be the expected rate of return on that
Reference No:- TGS02800500

Expected delivery within 24 Hours