Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, - 2796

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Request Description

Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock?

A.  14.37%

B.  9.37%

C.  20.62%

D.  15.62%

Solution Description

Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. A