the X company has the beta of 1.5 .the expected return is 15% the risk free rate of interest is 5 %.which is the market return.

Question

Quizplus · Accepted Answer

The correct answer is A because the market return can be calculated using the Capital Asset Pricing Model (CAPM) formula: Market Return = Risk-Free Rate + Beta * (Expected Return - Risk-Free Rate). Plugging in the given values, we get: Market Return = 5% + 1.5 * (15% - 5%) = 6.67%.

The X Company Has the Beta of 1