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The expected return on Kiwi Computers stock is 16.6 percent. If the risk-free rate is 4 percent and the expected return on the market is 10 percent, then what is Kiwi's beta?
The expected return on Kiwi Computers stock is 16.6 percent. If the risk-free rate is 4 percent and the expected return on the market is 10 percent, then what is Kiwi's beta?A. 2.10 B. 1.26
C. 2.80 D. 3.15
B. 1.26Explanation:The formula to calculate theexpected returnof a stock using the Capital Asset Pricing Model (CAPM) is:Expected Return= Risk-Free Rate + Beta*(Expected Return on Market - Risk-Free Rate)Given:- Expected Return on Kiwi Computers stock = 16.6%- Risk-Free Rate = 4%- Expected Return on Market = 10%Substituting the values in the formula:16.6% = 4% + Beta*(10% - 4%)12.6% = Beta*6%Beta = 12.6%/6% = 2.1Therefore, the answer is B. 1.26.To know more aboutExpected Return:brainly.com/question/17152687#SPJ11...
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