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Chris M., M.S.W. Social Work
Category: Homework
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Experience:  Master's Degree, strong math and writing skills, experience in one-on-one tutoring (college English)
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# Investors expect the market rate of return this year to be

### Resolved Question:

Investors expect the market rate of return this year to be 17%. A stock with a beta of 2.1 has an expected rate of return of 15%. If the market return this year turns out to be 13%, what is the rate of return on the stock? (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Stock return %
Submitted: 5 years ago.
Category: Homework
Expert:  Chris M. replied 5 years ago.

Hello, and thanks for the question.

2.1 * (13% - 17%) = -4.2%

-4.2% + 15% = 10.8%

Hope this helps!

Customer: replied 5 years ago.
Customer: replied 5 years ago.
any reason why this would give me an incorrect answer? picture attached
Expert:  Chris M. replied 5 years ago.