Figuring the CAPM: What must the expected return be?
A stock has an expected return of 10%, its beta is 0.9, and the risk-free rate is 5%. What must the expected return on the market be?© SolutionLibrary Inc. solutionlibary.com 9836dcf9d7 https://solutionlibrary.com/business/finance/figuring-the-capm-what-must-the-expected-return-be-30l
... (5%) + the stock's Beta (0.9) X Market Risk Premium (MRP).
MRP is equal to the difference between the expected return on a market ...