The company that prints unemployment insurance checks is named Counter

The company that prints unemployment insurance checks is named Countercyclical Printing, Inc Countercyclical Printing’s beta is -0.75, the risk free rate is 8%, and the risk premium on the market is 7%.

What is the equilibrium expected rate of return on Countercyclical Printing’s stock?
A) -8.75%
B) -3.25%
C) 2.75%
D) 4.50%
E) 5.25%

ANSWER

C