The Risk-Free Rate Is 3

Multiple Choice

The risk-free rate is 3.0 percent and the expected return on the market is 9 percent.Stock A has a beta of 1.20.For a given year,Stock A returned 12.5 percent while the market returned 9.75 percent.The systematic portion of Stock A's unexpected return was _____ percent and the unsystematic portion was _____ percent.

A) 0.80; 1.30
B) 0.90; 1.40
C) 1.11; 2.30
D) 1.40; 0.90
E) 4.62; 1.41