Quiz 5 - Risk & Return
1.6 - ANS-Polly Khan is trying to calculate Builtrite's beta given the following
information: The current market rate of interest is 8%. The current risk-free rate is 3%. If
investor's have been requiring a 11% annual return on Builtrite's stock, what is the
stock's beta?
CAPM = RF + b(KM - RF)
11 = 3 + X(8 - 3)
8 = 5X
1.6 = beta
2.6
2.2
1.9
1.6
1.75 - ANS-Polly Khan is trying to calculate Builtrite's beta given the following
information: The current market rate of interest is 8%. The current risk-free rate is 4%. If
investor's have been requiring a 11% annual return on Builtrite's stock, what is the
stock's beta?
CAPM = RF + b(KM - RF)
11 = 4 + X(8 - 4)
7 = 4X
1.75 = beta
2 - ANS-Polly Khan is trying to calculate Builtrite's beta given the following information:
The current market rate of interest is 8%. The current risk-free rate is 3%. If investor's
have been requiring a 11% annual return on Builtrite's stock, what is the stock's beta?
CAPM = RF + b(KM - RF)
11 = 5 + X(8 - 5)
6 = 3X
2 = beta
1.6 - ANS-Polly Khan is trying to calculate Builtrite's beta given the following
information: The current market rate of interest is 8%. The current risk-free rate is 3%. If
investor's have been requiring a 11% annual return on Builtrite's stock, what is the
stock's beta?
CAPM = RF + b(KM - RF)
11 = 3 + X(8 - 3)
8 = 5X
1.6 = beta
2.6
2.2
1.9
1.6
1.75 - ANS-Polly Khan is trying to calculate Builtrite's beta given the following
information: The current market rate of interest is 8%. The current risk-free rate is 4%. If
investor's have been requiring a 11% annual return on Builtrite's stock, what is the
stock's beta?
CAPM = RF + b(KM - RF)
11 = 4 + X(8 - 4)
7 = 4X
1.75 = beta
2 - ANS-Polly Khan is trying to calculate Builtrite's beta given the following information:
The current market rate of interest is 8%. The current risk-free rate is 3%. If investor's
have been requiring a 11% annual return on Builtrite's stock, what is the stock's beta?
CAPM = RF + b(KM - RF)
11 = 5 + X(8 - 5)
6 = 3X
2 = beta
