Suppose the MiniCD Corporation's Common Stock Has a Return of 12

Multiple Choice

Suppose the MiniCD Corporation's common stock has a return of 12%. Assume the risk-free rate is 4%,the expected market return is 9%,and no unsystematic influence affected Mini's return. The beta for MiniCD is:

A) 0.89.
B) 1.60.
C) 2.40.
D) 3.00.
E) It is impossible to calculate beta without the inflation ratE. 12 = 4 + β(9 - 4) ; 8 = 5β; β = 8/5 = 1.60