Consider the Following Information on Stocks I and II

question 56

Multiple Choice

Consider the following information on Stocks I and II: The market risk premium is 8 percent, and the risk-free rate is 3.6 percent. The beta of stock I is _____ and the beta of stock II is _____.

• A)2.08; 2.47
• B)2.08; 2.76
• C)3.21; 3.84
• D)4.47; 3.89
• E)4.47; 4.26

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