Question
Suppose the beta estimated from the CAPM for stock A is 2.3 and stock B is 1.1. Which of the following is true? A. The
Suppose the beta estimated from the CAPM for stock A is 2.3 and stock B is 1.1. Which of the following is true?
A. The beta of the equally weighted portfolio of stock A and B is 1.2
B. According to the CAPM, the required rate of return of stock B is higher
C. According to the CAPM, stock A has a higher idiosyncratic risk
D. None of the aboveAnswer
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American Public School Finance
Authors: William A. Owings, Leslie S. Kaplan
1st Edition
0495807834, 9780495807834
