How to find the expected rate of return on a stock
R = portror(Return,Weight) returns a 1 -by- M vector for the expected rate of return . Examples. collapse all To find the return on the zero coupon bond, we first need to find the price of the bond today. Since one year has So, the expected return of each stock asset is:. 25 Feb 2020 If capm is greater than the expected return the security is overvalued… CAPM is calculating the return required for a given amount of risk. Beta, Risk free rate and the return on the market. then go long the security because the stock expects to return an amount greater than required based on the risk.