The risk-free rate is 5 percent and the market risk premium is 8 percent. Stock Y's beta is 1.85 and the standard deviation of its returns is 62.5 percent. What should be the stock's expected rate of return for the stock price to be considered in equilibrium?
A. 10.55%
B. 12.82%
C. 15.54%
D. 14.80%
E. 19.80%
Answer: E
Business
You might also like to view...
The income statement indicates a business's success or failure in earning an income from its operating activities, but it does not reflect the inflow and outflow of cash from operating activities
Indicate whether the statement is true or false
Business
A company's total cost of FIFO inventory was $329,000 and its current replacement cost is $307,000. Under the lower cost or market, the amount reported should be $329,000.
Answer the following statement true (T) or false (F)
Business
What are the three main response options for customers who experience service failures?
What will be an ideal response?
Business
What are the guidelines you should follow when extending credit?
Business