The stock of Jen's Boutique has a beta of 126

Finance Dec 23, 2020

The stock of Jen's Boutique has a beta of 126. The rise free rate of returi 415% and the market risk premium is 78% What is the expected rate of return on Jen's stock Multiple Choice O 077 O 20% 990 15.21

Expert Solution

Expected rate of return = Rf + beta(Rm-Rf)

= 4.15 +1.26 (8.78- 4.15)

= 4.15 + 5.83

= 9.98%

so, option c is correct i.e. expected return on jen's stock is 9.98%

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