Multiple Choice
Consider an investor who holds a risky portfolio that has the same risk as the market portfolio. If the beta is one then the investor should expect to earn ________. Consider another investor who holds a riskless portfolio such as Treasury bills. If the beta is zero then the investor should earn ________.
A) the riskless rate of return; the market portfolio rate of return.
B) the risky return; the riskless rate of return.
C) the market portfolio rate of return; the riskless rate of return.
D) the market portfolio rate of return; the corporate bond rate of return.
Correct Answer:
Verified
Correct Answer:
Verified
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