stock a has a beta of 1.47 while stock b has a beta of 1.08 and an expected return of 13.2 percent. 16.34 percent is the expected return on stock a if the risk-free rate is 4.5 percent and both stocks have equal reward-to-risk premiums.
The anticipated profit or loss on an investment with known historical return rates is known as the expected return (RoR). It is determined by dividing possible results by the likelihood that they will occur, adding the results, and then subtracting the results.
The profit or loss an investor can anticipate realizing from an investment is known as the expected return.
Calculating an expected return involves multiplying possible outcomes by their likelihood before
The investment return that an asset is anticipated to generate over and above the risk-free rate of return is known as a risk premium.
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