Ivanhoe, Inc., stock has a beta of 1.65. If the expected market return is 17.5 percent and the risk-free rate is 7.5 percent, what does CAPM indicate the appropriate expected return for Ivanhoe stock is

r or expected rate of return = 0.0.24 or 24%

Explanation:

Using the CAPM, we can calculate the required/expected rate of return on a stock. This is the minimum return required by the investors to invest in a stock based on its systematic risk, the market's risk premium and the risk free rate.

The formula for required rate of return under CAPM is,

r = rRF + Beta * (rM - rRF)

Where,

r = 0.075 + 1.65 * (0.175 - 0.075)

r or expected rate of return = 0.0.24 or 24%

answer; exemplars;

match the scenarios with terms related to financial aid.

pell grant

student loan

merit-based scholarship

richard is one of the leading college basketball players in the state of florida. he also maintains a good academic record. looking at his talent and potential, furman university offers to bear the expenses for his college education.

arrowright

anita wants to pursue a certificate program in sports nutrition. to pay for the course, she borrows money by filing the fafsa.

arrowright

nathan comes from a low-income household. he wants to pursue an undergraduate degree in marketing. he receives financial aid covering 50 percent of his college expenses. nathan does not have to pay back this amount.

arrowright