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Bass clef music stores' stock has a risk premium of 7 percent while the inflation rate is 1. 9 percent and the risk-free rate is 2. 2 percent. what is the expected return on this stock?

Respuesta :

ahmadfardeen571

The expected return on this stock is  9.2 percent

Given data,

Risk premium = 7 percent

Inflation rate = 1.9 percent

Risk-free rate = 2.2 percent

To find out

expected return on this stock

Solution,

we know that the expected return on this stock formula is expressed as here

Expected return on this stock = Risk-free rate + Risk premium  

Put here value we get Expected return

Expected return =  2.2 percent + 7 percent

Expected return =  9.2 percent

So expected return on this stock is  9.2 percent.

Learn more about stock here: https://brainly.com/question/25818989

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