Question
The covariance between Stock X and the market is 0.60 and the variance of the market is 0.40. The risk-free rate is 3.25% and the
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The covariance between Stock X and the market is 0.60 and the variance of the market is 0.40. The risk-free rate is 3.25% and the expected market risk premium is 7.50%. What is the expected return of Stock X.
A. 7.75%
B. 9.63%
C. 10.75%
D. 13.4%
E. 14.5%
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Personal Finance
Authors: Jeff Madura
6th Edition
0134082915, 9780134082912
