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The Stock of Alpha Company Has an Expected Return of 18

Question 20

Multiple Choice

The stock of Alpha Company has an expected return of 18% and a beta of 1.5,and Gamma Company stock has an expected return of 15.6% and a beta of 1.2.Assume the CAPM holds.What's the risk-free rate?


A) 8.0%
B) 6.0%
C) 0%
D) 4.7%

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