Explain and work in excel
Expected return on the market portfolio is 17.7 percent and risk free rate is 4.1 percent.
Edward Jones has a beta of 1.6. Under CAPM
A. what is the expected return on Edward Jones stock
B. If risk free rate decreases to 3 percent, what is the expected return on Edward Jones stock.
Please see the calculations as shown below
Under CAPM the expected return = risk free rate + beta *(expected market return ...
Formula and calculation for expected Return under CAPM is given in solution.