Question

​(Capital asset pricing model​)

Using the​ CAPM, estimate the appropriate required rate of return for the three stocks listed​ here, given that the​ risk-free rate is 6

percent and the expected return for the market is 17 percent.

STOCK		BETA
A		0.75
B		0.94
C		1.31
​(Click on the icon located on the​ top-right corner of the data table above in order to copy its contents into a spreadsheet.​)

a. Using the​ CAPM, the required rate of return for stock A is ______​%. ​(Round to two decimal​ places.)

b. Using the​ CAPM, the required rate of return for stock B is _____​%. ​(Round to two decimal​ places.)

c. Using the​ CAPM, the required rate of return for stock C is ______​%. ​(Round to two decimal​ places.)

Answer 1