The Risk Premium for an Individual Security Is Computed By

Multiple Choice

The risk premium for an individual security is computed by:

A) multiplying the security's beta by the market risk premium.
B) multiplying the security's beta by the risk-free rate of return.
C) adding the risk-free rate to the security's expected return.
D) dividing the market risk premium by the quantity (1 + β) .
E) dividing the market risk premium by the beta of the security.