The stock of Static Corporation has a beta of 0.7. If the expected return on the market increases by 6%, the expected return on Static Corporation should increase by

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Quizplus · Accepted Answer

The expected return on Static Corporation's stock can be calculated using the formula for the Capital Asset Pricing Model (CAPM), which is: Expected Return = Risk-Free Rate + Beta * (Market Return - Risk-Free Rate). Given that the beta is 0.7 and the market return increases by 6%, the increase in expected return for Static Corporation would be 0.7 * 6% = 4.2%.

The Stock of Static Corporation Has a Beta of 0