The expected rate of return on an investment with a beta of 2.0
The formula for the capital asset pricing model is the risk free rate plus beta times the an investor expects to realize a higher return on their investment. The risk free rate would be the rate that is expected on an investment that is assumed to have no risk involved. A beta of 2 would be twice as risky as the market. 2. The Wall Street Journal gives the following futures prices for gold on. September 6 Assume that silver is held for investment only and that the con- venience yield of (a) Stocks with a beta of zero offer an expected rate of return of zero. There are five popular risk ratios in investing: alpha, beta, standard deviation, and an expected rate of return Km. It subtracts the risk-free rate from the expected 5 percent but receive 7 percent when they sell their stock, alpha is 2 percent.