Calculate the required return and expected return for stock

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Reference no: EM132072259

1. An analyst gathered the following information for a stock and market parameters: stock beta = 1.4; expected return on the Market = 12.3%; expected return on T-bills = 4.6%; and current stock Price = $5.41. Calculate the required return and expected return for this stock. What is this stock's required rate of return? (4 decimals)

2. The market risk premium for next period is 8.9% and the risk-free rate is 2.7%. Stock Z has a beta of 1.3 and an expected return of 9.3%. What is the reward-to-risk ratio for Stock Z? (3 decimals)

Reference no: EM132072259

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