A stock has an expected return of 14.59 percent and a beta of 1.35.What is the risk-free rate if the market rate is 12.7 percent?
A)6.48 percent
B)6.92 percent
C)7.01 percent
D)7.30 percent
E)7.90 percent

Name: A stock has an expected return of 14.59 percent and a beta of 1.35.What is the risk-free rate if the market rate is 12.7 percent? A)6.48 percent B)6.92 percent C)7.01 percent D)7.30 percent E)7.90 percent
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Question

Quizplus · Accepted Answer

14.59 = r_f + 1.35 (12.7 - r_f); r_f = 7.3 percent

A Stock Has an Expected Return of 14