Question
In: Finance
Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: =...
Given the following information, determine the beta coefficient for Stock L that is consistent with equilibrium: = 13%; rRF = 4.65%; rM = 12.5%. Round your answer to two decimal places.
Solutions
Expert Solution
Expected return = rRF + Beta(rM - rRF)
0.13 = 0.0465 + Beta(0.125 - 0.0465)
0.13 - 0.0465 = Beta(0.0785)
Beta = (0.13 - 0.0465) / 0.0785
Beta = 1.06
jeff jeffy answered 2 years agoRelated Solutions
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