The expected return on stock , of expected market return of 15%,beta of 3.5 and T-bill (Treasury bills) rate of 5% is 40%.
T-bill rate r(f)= 5%
Expected market return r(m) = 15%
Beta(ß) = 3.5
Expected return e(r) = r(f)+ß [r(m)-r(f)]
                 = 5+ 3.5[15-5]
                 = 5+35
                 = 40%
Treasury bills are issued when the government requires funds for a short period of time. These bills are only issued by the government, and the interest rate on them is determined by market forces. Treasury bills, also known as T-bills, have a maximum maturity of 364 days. As a result, they are classified as money market instruments (money market deals with funds with a maturity of less than one year). Treasury bills are currently issued in three maturities: 91 days, 182 days, and 364 days.
Learn more about treasury bill (T-bills) here:
https://brainly.com/question/15234748
#SPJ4
