Asset p has a beta of 1.1. The risk-free rate of return is 4 percent,
Asset p has a beta of 1.1. The risk-free rate of return is 4 percent, while the return on the market portfolio of assets is 12 percent. The asset’s required rate of return is:
A) 6%
B) 12.8%
C) 5.4%
D) 10%
E) 9.5%
ANSWER
B
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