Explore BrainMass

Explore BrainMass

    Required rate of return

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Assume that the risk-free rate is 5% and the market risk premium is 6%, what is the expected return for the overall stock market? What is the required rate of return that has a beta of 1.2?

    © BrainMass Inc. brainmass.com June 3, 2020, 11:04 pm ad1c9bdddf
    https://brainmass.com/business/beta-and-required-return-of-a-project/required-rate-of-return-262065

    Solution Preview

    The return can be calculated using the CAPM equation
    Expected return = Rf + (Rm-Rf) ...

    Solution Summary

    The solution explains how to calculate the required rate of return given the beta

    $2.19

    ADVERTISEMENT