The risk-free rate is 2.1% and the market risk premium is 5.5%. A stock has a...

The risk-free rate is 2.1% and the market risk premium is 5.5%. A stock has a beta of 1.1, what is its expected return of the stock? (Enter your answers as a percentage. For example, enter 8.43% instead of 0.0843.)

Expert Solution

Expected return = Risk-free rate + Beta(Market risk premium)

Expected return = 0.021 + 1.1(0.055)

Expected return = 0.0815 or 8.15%

jeff jeffy answered 2 years ago

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