Multiple Choice
Mary is considering investing in Lensgate Industries Ltd., a Canadian common stock with a historic annual rate of return of 9%. The stock is as risky as the portfolio of Canadian common stocks. If Government of Canada t-bills currently yield 4% and a portfolio of Canadian common stocks has a risk premium of 6%, what should be Mary's minimum acceptable rate of return if she invests in this stock?
A) 14%
B) 10%
C) 9%
D) 6%
Correct Answer:
Verified
Correct Answer:
Verified
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