If the market rate of return is 12%, and the beta on Consolidated Edison is .8, the return on Con Ed is:
A) greater than 12%
B) less than 12%
C) greater or less than 12%, depending on the risk-free rate of return
D) dependent on some other factors

Question

Quizplus · Accepted Answer

The return on Con Ed can be calculated as: 
12% * 0.8 = 9.6%
This is less than the market rate of return, so the answer is B.

If the Market Rate of Return Is 12%, and the Beta