Stock a Has a Standard Deviation of 20% and a Correlation

question 105

Multiple Choice

Stock A has a standard deviation of 20% and a correlation coefficient of 0.64 with market returns.The market risk premium is 12% with a standard deviation of 15%.The risk-free rate is 5%.What is the required rate of return of Stock A?

• A)8.58%
• B)10.95%
• C)12.47%
• D)15.20%

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Definitions:

Labor

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Units

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