Multiple Choice
A stock has a beta coefficient, β, equal to 1.20. The risk premium associated with the market is 9 percent, and the risk-free rate is 5 percent. Application of the capital asset pricing model indicates that the stock's appropriate return should be _____.
A) 9.8%
B) 5.2%
C) 12.5%
D) 15.8%
E) 17.2%
Correct Answer:
Verified
Correct Answer:
Verified
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