USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return ($\lambda$0) = .025 and the risk premiums for the two factors are ($\lambda$1) = .12 and ($\lambda$0) = .10.

-Refer to Exhibit 7.10. Calculate the expected returns for stocks A, B, and C. A B C
A) 0.082 0.091 0.033
B) 0.105 0.109 0.032
C) 0.132 0.128 0.033
D) 0.165 0.121 0.032
E) 0.850 0.850 0.610

Question

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A, B, and C have two risk factors with the following beta coefficients. The zero-beta return ($\lambda$0) = .025 and the risk premiums for the two factors are ($\lambda$1) = .12 and ($\lambda$0) = .10.
 
-Refer to Exhibit 7.10. Calculate the expected returns for stocks A, B, and C. A B C
A) 0.082 0.091 0.033 
B) 0.105 0.109 0.032 
C) 0.132 0.128 0.033 
D) 0.165 0.121 0.032 
E) 0.850 0.850 0.610

Quizplus · Accepted Answer

The expected returns for stocks A, B, and C are calculated based on the given probabilities and returns in Exhibit 7.10, resulting in 0.105 for A, 0.109 for B, and 0.032 for C.

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stocks A λ\lambdaλ

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Stocks A $\lambda$