T Corporation Has a Standard Deviation on Its Common Stock

question 32

Multiple Choice

T. Corporation has a standard deviation on its common stock of 75 percent and a correlation with market returns of 0.40. The market's standard deviation and expected return are 15 percent and 14 percent, respectively, and the risk-free rate of return is 8 percent. Calculate T. Corporation's required rate of return.

• A)1.867%
• B)9.867%
• C)19.20%
• D)14.06%

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