The risk-free speed of return is 2,2 percent, the standard market return is 11 percent, and the beta for the solstice, inc. is 1.12. (12.05%) is solstice's required rate of return.
Essential rate of return = Risk-free return + Beta
(Market return - Risk-free return)
Vital rate of return = 2.2% + 1.12 (11% - 2.2%)
Required rate of return = 12.05%
Hence, the right option is D (12.05%).
The risk-free rate is the momentum of return presented by an investment that carries zero risk. Every investment carries some level of risk, yet small, so the risk-free rate is.
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