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Dinner Foods Stock Has a Beta of 1

Question 74

Multiple Choice

Dinner Foods stock has a beta of 1.45 and an expected return of 13.43%. Edwards' Meals stock has a beta of .95 and an expected return of 10.27%. Assume that both stocks are correctly priced. Given this, the risk-free rate is ________% and the market rate of return is ________%.


A) 4.02; 11.53
B) 4.09; 12.35
C) 4.10; 11.53
D) 4.27; 10.59
E) 4.41; 10.25

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