When the return on the market portfolio goes up by 5%, the return on Stock...
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Accounting
When the return on the market portfolio goes up by 5%, the return on Stock A goes up on average by 8% and when the market portfolio return goes down by 5%, Stock A return goes down by 6%.
a) Calculate the beta of this stock.
b) Assuming that CAPM holds, calculate the required rate of return on this stock by assigning values for the risk-free rate= 2% and the expected return=12% on the market portfolio
I'd be glad if you'd reply quickly. Its kinda urgent :)
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