Multiple Choice
Consider the single-factor APT. Stocks A and B have expected returns of 12% and 19%, respectively. The risk-free rate of return is 3%. Stock B has a beta of 1.2. If arbitrage opportunities are ruled out, stock A has a beta of
A) 0.47.
B) 1.00.
C) 1.30.
D) 1.69.
E) 0.75.
Correct Answer:
Verified
Correct Answer:
Verified
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