The Expected Return of a Stock Is 13 Percent, and Its

question 50

Multiple Choice

The expected return of a stock is 13 percent, and its beta is 1.08. If the risk-free rate is 5.5 percent and the stock is correctly priced, what is the slope of the security market line?

• A) 7.50%
• B) 7.38%
• C) 5.73%
• D) 6.94%
• E) 7.09%