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Question 9 (4 points) Below are returns on the stock A and S&P500...

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Accounting

Question 9 (4 points)

Below are returns on the stock A and S&P500 index. All numbers are in decimals (-0.0222 is equivalent to -2.22%).

A S_P500
-0.0222 0.0032
-0.0048 -0.0058
0.1333 0.0434
0.0765 0.1081
-0.0161 -0.0121
0.1250 0.1400
0.0145 0.0368
-0.0475 -0.0454
0.0430 0.0577
-0.0260 -0.1374
0.0071 0.0064
0.0249 0.0186
0.0850 0.0215
-0.0624 -0.0752
0.0933 0.0365
0.0456 0.0528
-0.0632 -0.0131
0.0450 0.0009
0.0200 0.0017
0.0280 0.0985

Suppose that the next S&P500 return will be 7%. Use the CAPM model to calculate the expected return on the stock A. Assume the risk-free rate of 1%.

Please write an answer in decimals. For example, 12.34% would be 0.1234. Also, round your answer to the fourth decimal.

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