A particular stock has a beta of 1.4 and an expected return of 13%.If the expected risk premium on the market portfolio is 6%,what's the expected return on the market portfolio?

Name: A particular stock has a beta of 1.4 and an expected return of 13%.If the expected risk premium on the market portfolio is 6%,what's the expected return on the market portfolio?
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Quizplus · Accepted Answer

13% = R_f + 1.4 (6%) R_f = 4.6% Expected market return = 4.6% + 6% = 10.6%

A Particular Stock Has a Beta of 1