XYZ Corp has an expected return of 16%.If the risk free rate is 4.5% and the return for the market is 20%,calculate the Beta for XYZ.
A) 1.35
B) 0.86
C) 0.74
D) 1.12
E) 0.95

Question

Quizplus · Accepted Answer

Rearrange the CAPM equation to solve for beta. E(k_i) = k_F + β_i[E(k_M) - k_F] β_i = 11ea7fdb_fc10_1871_a768_8f8029de89cf_TB2902_11 β_i = 11ea7fdb_fc10_1872_a768_99faf685f011_TB2902_11 = 11ea7fdb_fc10_1873_a768_b7bc4fd05d7a_TB2902_11 = 0.74

XYZ Corp Has an Expected Return of 16