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Which One of the Following Should Earn the Highest Risk

Question 19

Multiple Choice

Which one of the following should earn the highest risk premium based on CAPM?


A) Diversified portfolio with returns similar to the overall market
B) Stock with a beta of 1.38
C) Stock with a beta of .74
D) U.S. Treasury bill
E) Portfolio with a beta of 1.01

Correct Answer:

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