The risk-free rate is 7 percent. The expected market rate of return is 15 percent. If you expect stock X with a beta of 1.3 to offer a rate of return of 12 percent, should you buy this stock or short sell it? Why?© BrainMass Inc. brainmass.com June 3, 2020, 6:53 pm ad1c9bdddf
Quick computation and rationale for answer. The expected market rate of returns is determined. The expert determines if you should buy a stock or short sell it.