The riskfree rate of return is currently 002 whereas the mar

The risk-free rate of return is currently 0.02, whereas the market risk premium is 0.07. if the beta of RIP, Inc., stock is 1.6, then what is the expected return on RKP?

Solution:

Risk free rate = 2%

market risk premium = 7%

Beta of stock = 1.60

Expected return on stock = Rf + Beta * Market risk premium

= 2% + 1.60 * 7% = 13.20% = 0.132

The risk-free rate of return is currently 0.02, whereas the market risk premium is 0.07. if the beta of RIP, Inc., stock is 1.6, then what is the expected retur

The riskfree rate of return is currently 002 whereas the mar

Solution

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