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Assume That the Risk-Free Rate Is 5 Percent, and That

Question 11

Multiple Choice

Assume that the risk-free rate is 5 percent, and that the market risk premium is 7 percent. If a stock has a required rate of return of 13.75 percent, what is its beta?


A) 1.25
B) 1.35
C) 1.37
D) 1.60
E) 1.96

Correct Answer:

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