Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a beta of 1.2 is 20%. What is the risk-free rate?
A) 2%
B) 6%
C) 8%
D) 12%
Correct Answer:
Verified
Q2: Which of the following are assumptions of
Q3: In the context of the capital asset
Q4: The market portfolio has a beta of
Q5: The arbitrage pricing theory was developed by
Q6: According to the capital asset pricing model,
Q7: When all investors analyze securities in the
Q8: Consider the CAPM. The risk-free rate is
Q9: Empirical results estimated from historical data indicate
Q10: According to the capital asset pricing model,
Q11: In a well-diversified portfolio, _ risk is
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