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    Principles of Corporate Finance Study Set 5
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    Exam 8: Portfolio Theory and the Capital Asset Pricing Model
  5. Question
    If the Market Risk Premium Is (Rm - Rf) Is
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If the Market Risk Premium Is (Rm - Rf) Is

Question 18

Question 18

Multiple Choice

If the market risk premium is (rm - rf) is 8%, then according to the CAPM, the risk premium of a stock with beta value of 1.7 must be:


A) less than 12%
B) 12%
C) greater than 12%
D) cannot be determined

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