There Is a 30 Percent Probability That a Particular Stock

question 81

Multiple Choice

There is a 30 percent probability that a particular stock will earn a 17 percent return and a 70 percent probability that it will earn 11 percent.What is the risk-free rate if the risk premium on the stock is 8.60 percent?

• A)4.20 percent
• B)4.80 percent
• C)5.20 percent
• D)5.40 percent
• E)5.80 percent

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