FoundationNumeric answer
A stock has a beta of , the risk-free rate is and the equity risk premium is . What return does CAPM imply, in per cent?
Answer with a number. Fractions, powers and expressions like 23/6 or C(52,5) are read correctly in practice.
The worked solution is in Premium
The answer, the full working and the one idea to take away – for this and all 1,322 questions in the bank. Answer it in practice and your working is marked, with a known mistake named when you make one.
Learn the method
Reported in interviews at
More alpha and signal research questions
- A stock has market beta 1.2, the market’s volatility is 15% and the stock’s…Foundation
- A fund returned 12% with a risk-free rate of 2%.Applied
- When have momentum strategies historically suffered their worst drawdowns?Applied
- Hedging out the market, part 3 of 3Advanced
- You winsorise a standardised cross-section at ±3.Foundation
- A sample variance is 0.05, the shrinkage target is 0.04 and the shrinkage intensity is 0.3.Foundation