Math Problem Statement

A stock has a beta of 1.28 and a reward-to-risk ratio of 5.89 percent. If the risk-free rate is 4.3 percent, what is the stock's expected return?

Multiple Choice

10.36%

11.38%

11.84%

10.93%

1.24%

Solution

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Math Problem Analysis

Mathematical Concepts

Finance
Capital Asset Pricing Model (CAPM)
Risk and Return Analysis

Formulas

E(R_i) = R_f + β * [E(R_m) - R_f]

Theorems

Capital Asset Pricing Model (CAPM)

Suitable Grade Level

Grades 11-12 (Advanced Finance)