Answer:
1.9
Explanation:
The common stock of flavorful tea has an expected return of 14.31%
=14.31/100
= 0.1431
The return on the market is 9%
= 9/100
= 0.09
The risk free rate of return is 3.1%
= 3.1/100
= 0.031
Therefore, the beta can be calculated as follows
0.1413= 0.031 + beta(0.09-0.031)
0.1413= 0.031 + 0.09beta-0.031beta
0.1413=0.031 +0.059beta
0.1413-0.031= 0.059beta
0.1121= 0.059beta
beta= 0.1121/0.059
beta= 1.9
Hence the beta of this stock is 1.9
