A stock has an expected return of 15.5 percent, a beta of 1.50, and the expected return on the market is 12.1 percent. What must the risk-free rate

A stock has an expected return of 15.5 percent, a beta of 1.50, and the expected return on the market is 12.1 percent. What must the risk-free rate be? (Round your answer to 2 decimal places. Omit the "%" sign in your response.)

Answer:The Capital Asset Pricing Model (CAPM) gives the relationship between risk free rateand expected return.ra =rf +b ( rm - rf )Here ra is expected return, rf is risk free return and rm is...