Please check on my answer to the question below:
A stock has returns of a two year period of 12% and 6%, and market returns during the same period of 9% and 4%. The beta of the stock is:
I came up with 1.2 on the first one above
Given the above then,
current T-bill rate = 7%
expected market return = 10%
Expected rate of return, according to the CAPM model is ?
I came up with 10.6%