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A Particular Stock Has a Beta of 1

question 79

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A particular stock has a beta of 1.4 and an expected return of 13%.If the expected risk premium on the market portfolio is 6%,what's the expected return on the market portfolio?


Definitions:

Liquidity-Preference Model

An economic model that suggests the demand for money is primarily determined by interest rates, reflecting preferences for cash liquidity.

Federal Reserve

The central banking system of the United States, responsible for monetary policy, regulating banks, and ensuring financial stability.

Money Supply

The aggregate sum of funds present in an economy at a given moment, encompassing cash, coins, and the amounts maintained in checking and savings accounts.

Price Level

A measure of the average prices of goods and services in an economy at a specific point in time, often tracked to assess inflation or deflation.

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