All about Capital Asset Pricing Model
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Question - CAPM and Beta
Magnusdottir, Student (University), Iceland, Member
The beta of stock A is 0,8.
The risk free rate is 6%.
The market risk premium is 8,5%.
Assume the CAPM theory holds. What is the expected return of stock A? Can somebody help me with how this question is solved. Thanks......
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CAPM and Beta Example
Paul Kinnaird, Student (University), United States, Member The Capital Asset Pricing Model for stock A would be written:
RoR = Rate of Return
RFR = Risk Free Return
RoR for stock A = RFR + Beta(...
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CAPM and Beta
abdollah, Student (Other), Iran, Member In fact, the expected market return is: 8.5 + 6 = 14.5%
And the expected return of stock A is: 12.8%....
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CAPM, Calculating Expected Return
Muqeem Razvi, Teacher, Pakistan, Member If
B=0.8
Rf=6%
Rm-Rf=8.5,
Then
E(r) will be
12.8%,
Market risk premium is equal to Rm (Return on market portfolio) ...
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