Multiple Choice
Assume that the risk-free rate is 5 percent and that the rate of return on a balanced portfolio of common stocks is 9 percent. If a firm has a beta coefficient of 2, then its risk premium is
A) 18 percent.
B) 10 percent.
C) 8 percent.
D) 4 percent.
Correct Answer:
Verified
Correct Answer:
Verified
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