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Morrow Inc. stock has a beta of 1.3 Assume the capital-asset-pricing model holds. What is the expected return on Morrow's stock?

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Week 6 - problem 2

Suppose the expected return on the market portfolio is 14.7 percent and the risk-free rate is 4.9 percent.
Morrow Inc. stock has a beta of 1.3 Assume the capital-asset-pricing model holds.
a. What is the expected return on Morrow's stock?
b. If the risk-free rate decreases to 3.7 percent, what is the expected return on Morrow's stock?

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