What is the expected rate of return according to capm

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1. A stock has a beta of 2.7, the market expected return is 8% and the riskfree rate is 2%. What is the expected rate of return according to CAPM? Express your answer as a percentage, for example 3.18% should be entered as 3.18 without the percentage sign.

2. You own a stock that had returns of 11.39 percent, −7.68 percent, 24.62 percent, and 16.83 percent over the past four years. What was the geometric average return for this stock?

3. Ted wants to purchase some outstanding shares of preferred stock that promise an annual payment of $11.23 forever. Assuming Ted requires an investment return of 5.4 percent on similar investments, what is the most he should be willing to pay per share?

Reference no: EM131919593

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