green1 SG Assuming a risk-free rate of 8 percent and a market return of 12 percent,would you be willing to purchase a stock with a Beta of 1.5 and a rate of return of 14 percent?Anyone know how to answer this?
βέτά SG risk premium = 12% - 8% = 4% expected return = 8% + 1.5 (4%) = 14% i would be indifferent to the investment because the stock pays exactly what beta prescribed. (which is me, i rulez)
