A security has an expected rate of return of 0.15 and a beta of 1.25.The market expected rate of return is 0.10 and the risk-free rate is 0.04.The alpha of the stock is
A) 1.7%.
B) -1.7%.
C) 8.3%.
D) 3.5%.
E) none of the above.
Correct Answer:
Verified
Q10: The risk-free rate and the expected market
Q13: The Security Market Line (SML)is
A)the line that
Q19: In the context of the Capital Asset
Q70: The CAPM applies to
A) portfolios of securities
Q73: You invest $200 in security A with
Q76: A security has an expected rate of
Q79: Assume that a security is fairly priced
Q79: A "fairly-priced" asset lies
A) above the security-market
Q82: List and discuss two of the assumptions
Q83: Discuss how the CAPM might be used
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents