The Risk-Free Rate Is 5%,the Beta of Stock a Is

question 77

Multiple Choice

The risk-free rate is 5%,the beta of Stock A is 1.2,the beta of Stock B is 0.8,and the expected return on Stock A is 12.2%.What is the expected return on Stock B?

• A) 8.4%
• B) 9.2%
• C) 9.8%
• D) 11.0%
• E) 12.2%

---

Definitions:

Coworkers

Individuals who work together in the same organization or workplace, often sharing tasks and responsibilities.

Honest

The quality of being truthful, sincere, and free from deceit or fraud.

Self-monitoring

The practice of paying attention to one's own behavior and its effects on others, with the potential to adjust behavior based on social cues.

Judged

Considered or deemed to be in a certain way, often involving forming an opinion or evaluation.