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Given the Following Data for a Stock: Risk-Free Rate =

Question 10

Multiple Choice

Given the following data for a stock: risk-free rate = 4%; factor-1 beta = 1.5; factor-2 beta
= 0) 5; factor-1 risk-premium = 8%; factor-2 risk-premium = 2%. Calculate the expected rate of return on the stock using the two-factor APT model.


A) 13%
B) 17%
C) 10%
D) none of the above

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