Multiple Choice
Assume that Stock I is related to two factors where the sensitivity coefficients, $i1 and $i2 are 1.4 and 0.8, respectively. If the risk-free rate is 8%, the premium for the first factor is 6% and the second factor premium is -2%, what is the stock's expected return?
A) 14.8%
B) 8.7%
C) 10.3%
D) 15.1%
E) 1.6%
Correct Answer:
Verified
Correct Answer:
Verified
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