Problem 11-15 Using CAPM A stock has an expected return of 10.5 percent, a beta of 1.55, and the expected return on the market is 8.5 percent. What must the risk-free rate be? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e. G., 32.16.)

the risk free rate of return is 4.86%

Step-by-step explanation:

The computation of the risk free rate is shown below;

As we know that

Expected return = Risk free rate of return + Beta × (Market rate of return - risk free rate of return)

10.5% = Risk free rate of return + 1.55 × (8.5% - Risk free rate of return)

10.5% = Risk free rate of return + 13.175% - 1.55 Risk free rate of return

10.5% - 13.175% = -0.55 risk free rate of return

-2.675% = -0.55 risk free rate of return

So, the risk free rate of return is

= 2.675% ÷ 0.55

= 4.86%

Hence, the risk free rate of return is 4.86%

connie < felicia < stew

step-by-step explanation:

stew:

we need to find the slope

m = (y2-y1)/ (x2-x1)

    = (2650-795)/(10-3)

    = 1855/7

265 words per minute

connie:

we need to find the slope

m = (y2-y1)/ (x2-x1)

we have two points (0,0) and (4,800)

m = (800-0)/(4-0)

  m = 800/4

    200 words per minute

felicia:

260 words per minute

200< 260 < 265

connie < felicia < stew

eve and marks ratios are equivalent

step-by-step explanation: