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You are considering an investment in a security with a beta of 1.4. Which of the following return on investments (ROIs) should your client earn?
You are considering an investment in a security with a beta of 1.4. Which of the following return on investments (ROIs) should your client earn? a. ROI equal to the risk-free rate plus the overall markets risk premium. b. ROI equal to the risk-free rate plus 140% of the overall markets risk premium. c. ROI equal to 3-month Treasury Bill rate of return (i.e., risk-free rate). d. ROI equal to the risk-free rate plus 60% of the overall markets risk premium.
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