The expected return on HiLo stock is 13.36 percent while the expected return on the market is 11.87 percent.The beta of HiLo is 1.14.What is the risk-free rate of return?
A)1)23%
B)3)21%
C)3)67%
D)4)28%
E)4)82%

Name: The expected return on HiLo stock is 13.36 percent while the expected return on the market is 11.87 percent.The beta of HiLo is 1.14.What is the risk-free rate of return? A)1)23% B)3)21% C)3)67% D)4)28% E)4)82%
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Quizplus · Accepted Answer

0.1336= R_f + 1.14(0.1187 − R_f) R_f = 0.0123 or 1.23%

The Expected Return on HiLo Stock Is 13