Examlex
You are given the following sample data for two variables:
The sample correlation coefficient for these data is approximately r = 0.755.
Risk-free Rate
The theoretical rate of return on an investment with no risk of financial loss, typically represented by government bonds.
Market Risk Premium
The additional return an investor requires for holding a risky market portfolio instead of risk-free assets, reflecting the extra risk.
Required Return
The minimum expected return by investors for investing in a particular asset, considering the risk associated with it.
Beta
It is a measure of a stock's volatility in relation to the overall market, indicating the stock's relative risk.
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