Assume That a Security Is Fairly Priced and Has an Expected

question 106

Multiple Choice

Assume that a security is fairly priced and has an expected rate of return of 0.13.The market expected rate of return is 0.13 and the risk-free rate is 0.04.The beta of the stock is ___.

• A)1.25.
• B)1.7.
• C)1.
• D)0.95.s.
• E)none of the above.

---

Definitions:

Latent Heat

The amount of heat absorbed or released by a substance during a phase change, without a change in temperature.