alleryStart learning →A stock's beta is 1 with a risk-free rate of 7% and a market return of 13%. What does CAPM give as its required return?
A7%
B13%
C6%
D20%
Answer & Solution
Correct answer: B. 13%
With beta equal to 1, required return = 7% + 1 x 6% = 13%, the market return.
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