The risk-free return is 4.43%, the inflation rate is 3.29%, and the expected return on the market is 12.00%. What is the expected real return for Hantz stock if it has a beta of 1.27? O 4.14% (plus or minus 38 bps) 10.41% (plus or minus 38 bps) 9.21% (plus or minus 38 bps) 8.43% (plus or minus 38 bps) None of the above is within 38 bps of the correct answer

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter2: Risk And Return: Part I
Section: Chapter Questions
Problem 12P: Stock R has a beta of 1.5, Stock S has a beta of 0.75, the expected rate of return on an average...
Question
The risk-free return is 4.43%, the inflation rate is 3.29%, and the expected return on the market is 12.00%. What is the expected real return for Hantz stock if it
has a beta of 1.27?
O 4.14% (plus or minus 38 bps)
10.41% (plus or minus 38 bps)
9.21% (plus or minus 38 bps)
8.43% (plus or minus 38 bps)
None of the above is within 38 bps of the correct answer
Transcribed Image Text:The risk-free return is 4.43%, the inflation rate is 3.29%, and the expected return on the market is 12.00%. What is the expected real return for Hantz stock if it has a beta of 1.27? O 4.14% (plus or minus 38 bps) 10.41% (plus or minus 38 bps) 9.21% (plus or minus 38 bps) 8.43% (plus or minus 38 bps) None of the above is within 38 bps of the correct answer
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