A Stock Has a Beta of 1

question 91

Multiple Choice

A stock has a beta of 1.8.The expected market return is 10.5%.The equilibrium return for the stock is 17.30%.What is the risk-free rate according to the CAPM?

• A) 1%
• B) 2%
• C) 3%
• D) 4%
• E) 5%