> Is there a formula for calculating required rate of return each stock?stock A (beta 1.2)stock B (beta 0.8)risk free rate

Is there a formula for calculating required rate of return each stock?stock A (beta 1.2)stock B (beta 0.8)risk free rate

Posted at: 2014-12-05 
Yes. the Capital Asset Pricing Model "CAPM": E(r) = RFR + ?(Rmkt - RFR)

Stock A: E(r) = 6 + 1.2(10 - 6) = 6 + 4.8 = 10.8%

Stock B: E(r) = 6 + 0.8(10 - 6) = 6 + 3.2 = 9.2%