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The Risk-Free Rate of Interest Is 4% and the Market

Question 125

Multiple Choice

The risk-free rate of interest is 4% and the market risk premium is 9%.Howard Corporation has a beta of 2.0,and last year generated a return of 16% with a standard deviation of returns of 27%.The required return on Howard Corporation stock is


A) 36%.
B) 34%.
C) 26%.
D) 22%.

Correct Answer:

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