Multiple Choice
The risk premium for exposure to exchange rates is 5%, and the firm has a beta relative to exchange rates of .4. The risk premium for exposure to the consumer price index is -6%, and the firm has a beta relative to the CPI of .8. If the risk-free rate is 3%, what is the expected return on this stock?
A) .2%
B) 1.5%
C) 3.6%
D) 4%
Correct Answer:
Verified
Correct Answer:
Verified
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