Marble Corp. has a beta of 2.5 and a standard deviation of returns of
Marble Corp. has a beta of 2.5 and a standard deviation of returns of 20%. The return on the market
portfolio is 15% and the risk-free rate is 4%. According to CAPM, what is the required rate of return
on Collectible’s stock?
A) 26.5% B) 37.5% C) 23.5% D) 31.5%
ANSWER
D
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