A stock has a beta value of 1.5.If the risk-free rate is 3% and the market risk premium is 8%,the stock's required return is 15%.

Question

Quizplus · Accepted Answer

Using the Capital Asset Pricing Model (CAPM), the required return of a stock is calculated as follows:
Required Return = Risk-Free Rate + Beta * Market Risk Premium
Substituting the given values, we get:
15% = 3% + 1.5 * 8%
15% = 3% + 12%
15% = 15%
Therefore, the statement is true.

A Stock Has a Beta Value of 1