Multiple Choice
Assume that the risk-free rate is 5%.Which of the following statements is CORRECT?
A) If a stock has a negative beta,its required return under the CAPM would be less than 5%.
B) If a stock's beta doubled,its required return under the CAPM would also double.
C) If a stock's beta doubled,its required return under the CAPM would more than double.
D) If a stock's beta were 1.0,its required return under the CAPM would be 5%.
E) If a stock's beta were less than 1.0,its required return under the CAPM would be less than 5%.
Correct Answer:
Verified
Correct Answer:
Verified
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