This is the formula for computing the required rate of return in a market: E(R) = Rf + ß( Rmarket - Rf ). This is called as the Capital Asset Pricing Model (CAPM). The E(R) represents the required rate of return; the Rf is the risk-free rate; the ß is the beta coefficient (which we are looking for); and the Rmarket is the rate of return on the market. Substituting the values to this formula, you can come up with the beta coefficient of 1.4.
