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Assume the Following Data for a Stock: Risk-Free Rate =

Question 9

Multiple Choice

Assume the following data for a stock: Risk-free rate = 4%; Factor-1 beta = 1.5; Factor-2 beta = 0.5; Factor-1 risk-premium = 8%; Factor-2 risk-premium = 2%.Calculate the expected rate of return on the stock using a two-factor APT model.


A) 14%
B) 17%
C) 10%
D) 13%

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