The Risk-Free Rate Is 3

question 35

Multiple Choice

The risk-free rate is 3.1 percent and the expected return on the market is 11 percent. Stock A has a beta of 1.34. For a given year, Stock A returned 16.7 percent while the market returned 12.2 percent. The systematic portion of Stock A's unexpected return was _____ percent and the unsystematic portion was _____ percent.

• A) 1.41; 1.61
• B) 1.61; 1.41
• C) 1.61; 3.01
• D) 1.41; 1.20
• E) 4.62; 1.41