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Assume that the CAPM holds. The risk-free rate is rf =4%. The expected return on...

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Finance

Assume that the CAPM holds. The risk-free rate is rf =4%. The expected return on the market portfolio is rm=10% and the volatility of the market portfolio is m=20%.

The covariance between the return of Apple's stock and that of the market portfolio is 0.048.

A)

What is the beta of Apple's stock?

Group of answer choices

0.6

0.8

1.0

1.2

b)

What is the expected return of Apple's stock?

Group of answer choices

11.2%

12.5%

14.8%

16.0%

Answer & Explanation Solved by verified expert
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