The Risk Premium for an Individual Security Is Computed by

question 33

Multiple Choice

The risk premium for an individual security is computed by

• A)adding the risk-free rate to the security's expected return.
• B)multiplying the security's beta by the market risk premium.
• C)multiplying the security's beta by the risk-free rate of return.
• D)dividing the market risk premium by the beta of the security.
• E)dividing the market risk premium by the quantity (1 − Beta).

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Definitions:

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