What is expected rate of return on stock

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1. What is the expected rate of return on a stock that has a beta of 1.62 if the market risk premium is 9.4 percent and the risk-free rate is 4.7 percent?

15.92 percent

19.93 percent

18.07 percent

19.00 percent

2. You own a $35,000 portfolio that is invested in a risk-free security and Stock A. The beta of Stock A is 1.90 and the portfolio beta is 1.25. What is the amount of the investment in Stock A?

$20,386

$23,846

$25,586

$23,026

3. Stock A has a beta of 2.2 and an expected return of 13.2 percent. Stock B has a beta of 1.14 and an expected return of 14.70 percent. At what risk-free rate would these two stocks be correctly priced?

14.13 percent

15.01 percent

16.31 percent

15.70 percent

Reference no: EM131913625

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