Problem:
A stock has an expected return of 9 percent, its beta is 0.6, and the risk-free rate is 4.95 percent.
Required:
Question: What must the expected return on the market be?
- 12.28%
- 12.17%
- 11.11%
- 11.70%
- 6.75%
Note: Explain all calculation and formulas.