The difference between the anticipated return on a market portfolio and the risk-free rate is known as the market risk premium (MRP). The market return - risk-free rate is = 12% - 6% = 6% to get the market risk premium.
A security's volatility or systematic risk in respect to the greater market is measured by a company's beta. The beta of an organization measures how its equity market value changes in reaction to changes in the larger market.
Beta is a metric that quantifies how much a stock will fluctuate in response to movements in the general stock market. A stock's price responsiveness to shifts in the general stock market is measured by beta
A stock's anticipated movement in relation to changes in the entire market is measured by the concept of beta. A stock with a beta larger than 1.0 is thought to be more volatile than the overall market, whereas one with a beta below 1.0 is thought to be less volatile.
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