What is the expected return for Asset X if it has a beta of 1.5,the expected market return is 15 percent,and the risk-free rate is 5 percent?
A)5.0%
B)7.5%
C)15.0%
D)20.0%

Question

Quizplus · Accepted Answer

The expected return for Asset X can be calculated using the Capital Asset Pricing Model (CAPM), which is:
Expected Return = Risk-Free Rate + Beta * (Expected Market Return - Risk-Free Rate)
Plugging in the given values, we get:
Expected Return = 5% + 1.5 * (15% - 5%) = 20%
Therefore, the expected return for Asset X is 20%, which is option D.

What Is the Expected Return for Asset X If It