PPO stock has a beta of 1.12 and an expected return of 12.64 percent.The risk-free rate of return is 3.85 percent.What is the expected return on the market?
A)7.85%
B)8.04%
C)11.62%
D)11.70%
E)12.16%

Name: PPO stock has a beta of 1.12 and an expected return of 12.64 percent.The risk-free rate of return is 3.85 percent.What is the expected return on the market? A)7.85% B)8.04% C)11.62% D)11.70% E)12.16%
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Question

Quizplus · Accepted Answer

E(r)= .1264 = .0385 + 1.12 (R_m - .0385)R_m = .1170,or 11.70%

PPO Stock Has a Beta of 1