Suppose the Binder Corporation's Common Stock Has a Return of 17

question 46

Multiple Choice

Suppose the Binder Corporation's common stock has a return of 17%. Assume the risk-free rate is 5%,the expected market return is 8%,and no unsystematic influence affected Binder's return. The beta for Binder is:

• A) 0.
• B) 2.
• C) 3.
• D) 4.
• E) It is impossible to calculate beta without the inflation ratE. 17 = 5 + β(8 - 5); β = 4

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