CFA Practice Question

There are 294 practice questions for this study session.

CFA Practice Question

Suppose the Technee Corporation's common stock has a beta of 1.2. If the risk-free rate is 5% and the expected market return is 8%, the expected return for Technee's common stock is ______.

A. 3.0%
B. 6.0%
C. 8.6%
Correct Answer: C

5 + 1.2(8 - 5) = 8.6%

User Contributed Comments 3

User Comment
mattg E(Rstock)=Rf+(E(Rm-Rf) x Beta(stock)
davcer the beta is higher than 1, so the only possible answer is C
ldfrench CAPM
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