1. Find the risk-free rate. This is the rate of return an investor could expect on an investment in which his or her money is not at risk, such as U.S ... 2. Determine the respective rates of return for the stock and for the market or appropriate index. These figures are also expressed as percentages. Usually the ... 3. Subtract the risk-free rate from the stock's rate of return. If the stock's rate of return is 7% and the risk-free rate is 2%, the difference would be 5%.
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