expected return question

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A stock has an expected return of 12.4 percent, its beta is 1.17, and the risk-free rate is 4.2 percent. What must the expected return on the market be? 

Jul 13th, 2015

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Using CAPM A stock has an expected return of of 1.17%, the risk-free rate is 4.2%, and the market risk premium is 4.2%. What must the beta be?

return = risk free + beta * (market - risk free)

0.12.4 = 0.017 + x*(0.042)

0.085x = 0.057

x = about 0.6706

during calculation error may occure...plz reculaclute

Please let me know if you nea case for torture by michale levined any clarification. I'm always happy to answer your questions.
Jul 13th, 2015

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Jul 13th, 2015
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