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Consider an Asset That Has a Beta of 1

Question 21

Multiple Choice

Consider an asset that has a beta of 1.5.The return on the risk-free asset is 6.5% and the expected return on the stock index is 15%.The estimated return on the asset is 20%.Calculate the alpha for the asset.


A) 19.25%
B) 0.75%
C) -0.75%
D) 9.75%
E) 9.0%

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