Assume That the Risk-Free Rate Is 5

question 63

Multiple Choice

Assume that the risk-free rate is 5%.Which of the following statements is CORRECT?

• A) If a stock has a negative beta,its required return under the CAPM would be less than 5%.
• B) If a stock's beta doubled,its required return under the CAPM would also double.
• C) If a stock's beta doubled,its required return under the CAPM would more than double.
• D) If a stock's beta were 1.0,its required return under the CAPM would be 5%.
• E) If a stock's beta were less than 1.0,its required return under the CAPM would be less than 5%.