A share is quoted at Rs. 60. An investor expects the

Solution

To calculate the required rate of return, we can use the Capital Asset Pricing Model (CAPM): Required Rate of Return (Cost of Equity) = Risk-Free Rate + Beta * Market Risk Premium Given values: Beta (β) = 1.5 Risk-Free Rate = 6% Market Risk Premium = 10% Required Rate of Return = 6% + 1.5 * 10% Required Rate of Return = 6% + 15% Required Rate of Return = 21% So, the required rate of return is 21%. The answer is b. 21%.