Monroe McIntyre has estimated the expected return for Bruehl Industries to be 10.50%. He notes the risk-free rate is 2.10% and the return of the market is 11.40%. Based on this information, he estimates Bruehl's beta to be:

Based on this information, he estimates Bruehl's beta to be:0.88___

Explanation:

Following  the  CAPM,Capital Asset Pricing Model formula,  The expected

return on stock  for Bruehl Industries is given as

Expected Return = Risk free Return + Market Risk Premium  X Beta  

or

Expected = Risk free rate + Beta x (Market rate - Risk free rate)

Where

Expected Return =10.50%

Risk free Rate= 2.10%,

Beta=??

market rate=11.40%

Expected = Risk free rate + Beta x (Market rate - Risk free rate)  

10.25 = 2.10 +  Beta ( 11.40- 2.10)

10.25-2.10= Beta (9.30)

8.15%/9.30%= Beta

Beta=0.876 rounded to 0.88

Based on this information, he estimates Bruehl's beta to be:0.88