The risk free rate on treasury bill is very low right now, Ask an Expert

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The risk free rate on Treasury bill is very low right now. Let's say it is 0.25%, annualized. Suppose, you also looked up the annual rate of change in the S&P500 market index, and it is 7%. You are considering a stock with a beta that is 10% less volatile than the overall market beta, which is always presumed to be 1. What is the minimum level of annual return that you would require on this investment? Explain and show calculations using the CAPM.

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Financial Management, Finance

Category:- Financial Management
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