Answer:
0.87
Explanation:
The beta of the stock can be calculated by rearranging the Reward to risk ratio formula. The Reward to risk ratio is given below
DATA
Risk free rate of return = 2.15%
Reward to risk ratio = 6.9%
Expected return = 8.19%
Beta =?
Reward to risk ratio = (expected return - risk free rate) / beta.
6.9% = ( 8.19% - 2.15%) / beta
6.9% = 6.04%/beta
beta = 6.04% / 6.9%
beta = 0.87
