USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 9.18. What is the required rate of return for Stock Y based on the capital asset pricing model (CAPM)?
A) 11.5%
B) 13.0%
C) 13.6%
D) 14.8%
E) 15.5%

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
 
-Refer to Exhibit 9.18. What is the required rate of return for Stock Y based on the capital asset pricing model (CAPM)?
A) 11.5% 
B) 13.0% 
C) 13.6% 
D) 14.8% 
E) 15.5%

Quizplus · Accepted Answer

The required rate of return using CAPM is calculated as: Risk-free rate + Beta * (Market return - Risk-free rate). The correct choice is based on the given values in Exhibit 9.18.