The risk free rate on Treasury bill is very low right now. Let's say it is 0.25%, annualized.
Suppose, you also looked up the annual rate of change in the S&P500 market index, and it is 7%.
You are considering a stock with a beta that is 10% less volatile than the overall market beta, which is always presumed to be 1
What is the minimum level of annual return that you would require on this investment? Explain and show calculations using the CAPM.