I have a question regarding stocks?

Question

If the risk free rate is 6.0% the market risk premium is 13.0%, and the expected return on security J is 14.7%, what is the beta for security J?

Answer 1

The formula to use is:
R_p = R_f + beta x (R_m - R_f)

Here
R_p = expected return portfolio
R_f = risk free rate
R_m = expected market return
R_m - R_f is the market risk premium

Plug in the values and solve for beta:
14.7 = 6.0 + beta x 13.0 which gives beta = 0.67

Answer 2

The answer of REc kid is correct

Beta is the slope ("b"), in the equation

Y = b*X + a

where,
X = the excess of return on an asset or portfolio over the risk free rate,
Y = the excess of return on the market over the risk free rate, i.e., the market risk premium.

To estimate this line and the slope parameter, you would need at least two points and estimate a best fit line, but if you consider c=zero, then you can say:

Beta = (14.7 - 6.0)/13.0 = 0.7

Answer 3

Beta is the slope ("b"), in the equation

Y = b*X + a

where,
X = the excess of return on an asset or portfolio over the risk free rate,
Y = the excess of return on the market over the risk free rate, i.e., the market risk premium.

To estimate this line and the slope parameter, you would need at least two points and estimate a best fit line, but if you consider c=zero, then you can say:

Beta = (14.7 - 6.0)/13.0 = 0.7

Answer 4

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