What is the expected return on a stock with a beta of 1.09, a market risk premium of 8%, and a risk- free rate of 4%?
A) 8.72%.
B) 12.72%.
C) 8.36%.
D) 4.36%.

Name: What is the expected return on a stock with a beta of 1.09, a market risk premium of 8%, and a risk- free rate of 4%? A) 8.72%. B) 12.72%. C) 8.36%. D) 4.36%.
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Question

Quizplus · Accepted Answer

The expected return can be calculated using the Capital Asset Pricing Model (CAPM): Expected Return = Risk-Free Rate + Beta * Market Risk Premium = 4% + 1.09 * 8% = 12.72%.

What Is the Expected Return on a Stock with a Beta