A Risky Asset Has a Beta of 1

question 46

Multiple Choice

A risky asset has a beta of 1.58 and an expected return of 17.6 percent. What is the risk-free rate if the risk-to-reward ratio is 8.4 percent?

• A) 2.74 percent
• B) 4.03 percent
• C) 4.33 percent
• D) 5.32 percent
• E) 5.82 percent

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