Assume That a Security Is Fairly Priced and Has an Expected

question 12

Multiple Choice

Assume that a security is fairly priced and has an expected rate of return of 0.17. The market expected rate of return is 0.11, and the risk-free rate is 0.04. The beta of the stock is

• A) 1.25.
• B) 1.86.
• C) 1.
• D) 0.95.