Risk-free rate and market risk premium

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Reference no: EM131854590

1. If the risk-free rate is 3% and the market risk premium is 7%, what is the required return for a stock with a beta of 1.6?

A. 9.40% B. 12.00% C. 14.20% D. 11.20%

2. What is the required return for a stock with a beta of 1.0 if the risk-free rate is 3% and the market risk premium is 7%?

A. 10.0% B. 4.0% C. 13.0% D. 7.0%

3. What is the required return for a stock with a beta of 0.7 if the risk-free rate is 3% and the market risk premium is 5%?

A. 6.5% B. 3.35% C. 3.5% D. 4.4%

4. You have $200 invested in stock A with a beta of 1.5, $200 invested in stock B with a beta of 1.9, and $100 invested in stock C with a beta of 0.8. If the risk-free rate is 3% and the market risk premium is 7%, what should be the required return of the portfolio?

A. 9.08% B. 15.04% C. 13.64% D. 14.20%

Reference no: EM131854590

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