CFP Certification Examination (China)

Practice session

Under the Capital Asset Pricing Model (CAPM / 资本资产定价模型), an investment analyst is evaluating Stock A listed on the Shanghai Stock Exchange. The current 1-year PRC Treasury bond yield is 2.50% (risk-free rate $R_f$), the expected return on the CSI 300 market index ($E(R_m)$) is 8.50%, and Stock A has an estimated systematic risk beta (贝塔系数 $\beta$) of 1.35. What is the required expected rate of return for Stock A?

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