Answer:
the beta of the stock is 0.67
Explanation:
The computation of the beta of the stock is shown below
As we know that
As per CAPM model
Expected rate of return = risk free rate + beta × (market rate of return - risk free rate)
0.10 = 0.06 + beta × (0.12 - 0.06)
Beta = 0.04 ÷ 0.06
= 0.67
Hence, the beta of the stock is 0.67
We simply applied the above formula so that the correct value could come
And, the same is to be considered
