Question
9. [2 marks] The CAPM holds. Stock A has an expected return of 5% and a market beta of 0.4. Stock B has an expected
9. [2 marks] The CAPM holds. Stock A has an expected return of 5% and a market beta of 0.4. Stock B has an expected return of 8% and a market beta of 1.2. What is the risk-free rate?
A. 0.35%
B. 3.5%
C. 4%
D. Something else
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Personal Finance Turning Money Into Wealth
Authors: Arthur Keown
8th Edition
0134730364, 978-0134730363
