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The expected return on Yang Kee Computers stock is 14.6 percent. If the risk-free rate is...

Question

The expected return on Yang Kee Computers stock is 14.6 percent. If the risk-free rate is...

The expected return on Yang Kee Computers stock is 14.6 percent. If the risk-free rate is 4 percent and the expected return o
The expected return on Yang Kee Computers stock is 14.6 percent. If the risk-free rate is 4 percent and the expected return on the market is 10 percent, then what is Yang Kee's beta? Assume market is in equilibrium. 1.77 ○ 2.10 O 2.80 3.15 o 2.60%

Answers

A. 1.77

Expected return = Risk-free rate + Beta(Expected return on market - Risk-free rate)

0.146 = 0.04 + Beta(0.10 - 0.04)

0.146 - 0.04 = Beta(0.06)

0.106 = Beta(0.06)

Beta = 0.106 / 0.06

Beta = 1.77


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