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The Market Expected Return Is 14 Percent with a Standard

Question 92

Multiple Choice

The market expected return is 14 percent with a standard deviation of 18 percent.The risk-free rate is 6 percent.Security XYZ has just paid a dividend of $1 and has a current price of $13.95.What is the beta of Security XYZ if its dividend is expected to grow at 6 percent per year indefinitely?


A) 0.85
B) 0.90
C) 0.95
D) 1.05

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