Return and CAPM Given an expected market return of 65 a beta

Return and CAPM Given an expected market return of 6.5%, a beta of 2.95 and a risk-free rate of 3.2%, what is the expected return for this stock?

Solution

expected return=risk-free rate +Beta*(MArket rate- risk-free rate )

=3.2+2.95*(6.5-3.2)

which is equal to

=12.935%