Your Estimate of the Market Risk Premium Is 7

question 11

Multiple Choice

Your estimate of the market risk premium is 7%.The risk-free rate of return is 3.5% and General Motors has a beta of 1.3.According to the Capital Asset Pricing Model (CAPM) ,what is its expected return?

• A)11.3%
• B)12.1%
• C)12.6%
• D)12.9%

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