# Expected Rate of Return using CAPM

1a. If the beta of Amazon.com is 2.2, risk-free rate is 5.5% and the market risk premium is 8%, calculate the expected rate of return for Amazon.com stock:

A. 15.8%

B. 14.3%

C. 35.2%

D. 23.1%

1b.If the beta of Exxon Mobil is 0.65, risk-free rate is 4% and the market rate of return is 14%, calculate the expected rate of return from Exxon:

A. 12.6%

B. 10.5%

C. 13.1%

D. 6.5%

https://brainmass.com/economics/risk-analysis/241440

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1a. If the beta of Amazon.com is 2.2, risk-free rate is 5.5% and the market risk premium is 8%, calculate the expected rate of return for Amazon.com stock:

A. 15.8%

B. 14.3%

C. 35.2%

D. 23.1%

Answer: D. 23.1%

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#### Solution Summary

Calculates Expected Rate of Return using Capital Asset Pricing Model (CAPM)

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