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The beta on Stock A equals 0.75, and the expected return equals 8.625%. The risk free rate...

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Finance

Thebeta on Stock A equals 0.75, and the expectedreturn equals 8.625%. The risk free rate equals 3%.Calculate the expected return on themarket.

(Enter percentages asdecimals and round to 4 decimals)

Answer & Explanation Solved by verified expert
4.2 Ratings (488 Votes)
Solution As per Capital Asset Pricing model the Expected return on stock is calculated using the following formula ER RF RM    See Answer
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