Average market return


Problem: The average stock market return in 20-ieth century has been 9%. Consider a security whose average return has been 7%, and whose beta is estimated at 0.5.

If last year average market return was 7%, what would you expect the return on the security to be? Explain. If you think there is not enough information to answer the question, explain why.

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Managerial Economics: Average market return
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