Homework SourseCalculate the required rate of return on a security with a b
Calculate the required rate of return on a security with a beta of 1.13. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
| The risk-free rate is 8% and the expected rate of return on the market portfolio is 13%. |
Solution
the required rate of return on a security = 8% + 1.13*(13% - 8%)
the required rate of return on a security = 13.65%
Underpriced
