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The Risk-Free Rate and the Expected Market Rate of Return

Question 80

Multiple Choice

The risk-free rate and the expected market rate of return are 6% and 16%, respectively. According to the capital asset pricing model, the expected rate of return on security X with a beta of 1.2 is equal to ________.


A) 12%
B) 17%
C) 18%
D) 23%

Correct Answer:

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