The expected return on the stock of bjb, Inc. is 15.15 percent. The market risk premium is 8.6 percent, and the risk-free rate is 3.8 percent. The beta for the stock is 1.32.
The anticipated value of a financial investment's return is known as the expected return. It is a measurement of the random variable's distribution's center, which is the return.
Expected return = Risk free rate + (Beta * Market risk premium)
15.15% = 3.8% (Beta * 8.6%)
Beta = (15.15% - 3.8%) / 8.6%
= 11.35% / 8.6% = 1.32
Stock's beta = 1.32
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