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A stock has an expected return of 13 percent, its beta is 1.35, and the expected return on the market is 11 percent. What must the risk-free rate be? Multiple Choice 5.55% 5.02% 5.50% 5.29% -1.85%

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter2: Risk And Return: Part I

Section: Chapter Questions

Problem 2P: AA Corporations stock has a beta of 0.8. The risk-free rate is 4%, and the expected return on the...

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Question

A stock has an expected return of 13 percent, its beta is 1.35, and the expected return on the market is 11 percent. What must the risk-free rate be?

Multiple Choice

5.55%
5.02%
5.50%
5.29%
-1.85%

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