• Shuffle
Toggle On
Toggle Off
• Alphabetize
Toggle On
Toggle Off
• Front First
Toggle On
Toggle Off
• Both Sides
Toggle On
Toggle Off
Toggle On
Toggle Off
Front

### How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

Play button

Play button

Progress

1/5

Click to flip

### 5 Cards in this Set

• Front
• Back
 k^ i k^ i = expected rate of return on the ith stock ki ki = required rate of return on the ith stock k bar k bar = realized return, after the fact k RF k RF = risk free rate of return RPi = (kM - k RF) bi = (RPM ) bi RPi = (kM - k RF) bi = (RPM ) bi = risk premium on the ith stock. The stocks risk premium will be less than, equal to, or greater than the premium on an average stock, RPM , depending on whether its beta is less than, equal to or greater than 1.0. If the beta of stock i is equal to the beta of the average stock then risk premium for i us the same as that of the market.