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A Risky Asset Has a Beta of 1

Question 4

Multiple Choice

A risky asset has a beta of 1.40 and an expected return of 17.6%. What is the risk-free rate if the risk-to-reward ratio is 8.4%?


A) 2.74%
B) 4.03%
C) 4.33%
D) 5.32%
E) 5.84%

Correct Answer:

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