What is the beta for a company with a 12% expected return, while treasury bills are...

What is the beta for a company with a 12% expected return, while treasury bills are yielding 5% and the market risk premium is 7%?

a. 0.5

b. 1.0

c. 0.75

d. 1.5

e. 1.25

Expert Solution

Expected rate=risk free rate+Beta*market risk premium

12=5+Beta*7

Beta=(12-5)/7

which is equal to

=1

jeff jeffy answered 2 years ago

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