A stock has a beta of 1.5. The market's expected total return is 10% pa and the risk free rate is 5% pa, both given as effective annual rates.
Over the last year, bad economic news was released showing a higher chance of recession. Over this time the share market fell by 1%. So rm=(P0−P−1)/P−1=−0.01, where the current time is zero and one year ago is time -1. The risk free rate was unchanged.
What do you think was the stock's historical return over the last year, given as an effective annual rate?