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Security a Has an Expected Rate of Return of 12

Question 83

Multiple Choice

Security A has an expected rate of return of 12% and a beta of 1.10.The market expected rate of return is 8% and the risk-free rate is 5%.The alpha of the stock is _________.


A) -1.7%
B) 3.7%
C) 5.5%
D) 8.7%

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