What must risk-free rate be

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1. A stock has an expected return of 14.5 percent, the risk-free rate is 4.6 percent, and the market risk premium is 8.3 percent. What must the beta of this stock be?

2. A stock has an expected return of 11.3 percent and a beta of 1.55, and the expected return on the market is 9.5 percent. What must the risk-free rate be? (Enter answer in percents, not in decimals.)

3. A stock has a beta of 1.1 and an expected return of 13%. The risk free rate is 4% and the expected return on the market portfolio is 11%. How much better (or worse) is the expected return on the stock compared to what it should be according to the CAPM?

Reference no: EM132031714

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