Question

To estimate the expected return on a risky asset, we need to know the ___. Multiple select question. market risk premium stock's beta risk-free rate annual dividend amount

Answer 1

We need to know the risk-free rate to allow us estimate the expected return on a risky asset,

The formula for the deriving the expected return on a risky asset is {Risk Free Rate + [Beta x Market Return Premium] · Expected return}.

• Hence, we need to know the risk-free rate to allow us estimate the expected return on a risky asset,

Therefore, the Option C is correct.

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