The company’s stock has a beta-coefficient of 1.5, and its market rate is 15%. With a risk-free rate of return is 8%. If the market rate increased by 1%, what is the expected rate of return?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 14P
icon
Related questions
Question

The company’s stock has a beta-coefficient of 1.5, and its market rate is 15%. With a risk-free rate of return is 8%. If the market rate increased by 1%, what is the expected rate of return?

Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Risk and Return
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT