A Stock's Average Return Is 10 Percent

question 32

Multiple Choice

A stock's average return is 10 percent. The average risk-free rate is 7 percent. The standard deviation of the stock's return is 4 percent, and the stock's beta is 1.5. What is the Treynor indexfor the stock?

• A) 0.03
• B) 0.75
• C) 1.33
• D) 0.02
• E) 50