What is the expected return of a zero-beta security?
A) The market rate of return
B) Zero rate of return
C) A negative rate of return
D) The risk-free rate

Name: What is the expected return of a zero-beta security? A) The market rate of return B) Zero rate of return C) A negative rate of return D) The risk-free rate
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Question

Quizplus · Accepted Answer

Zero-beta securities are expected to provide a return equivalent to the risk-free rate, as they are assumed to have no systematic risk.

What Is the Expected Return of a Zero-Beta Security