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    Corporate Finance Study Set 3
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    Exam 11: Return and Risk: the Capital Asset Pricing Model Capm
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    Alpha Stock Has a Beta of 1
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Alpha Stock Has a Beta of 1

Question 3

Question 3

Multiple Choice

Alpha stock has a beta of 1.43.The risk-free rate of return is 3.5 percent and the market rate of return is 11 percent.What is the amount of the risk premium on Alpha stock?


A) 5.24%
B) 5.50%
C) 7.50%
D) 8.77%
E) 10.73%

Correct Answer:

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