Question

The common stock of CTI has an expected return of 14.48 percent. The return on the market is 11.6 percent and the risk-free rate of return is 3.42 percent. What is the beta of this stock? O 149 O 1.31 O 95 O 142 O 135
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Answer #1

Expected return=Risk free rate+Beta*(MArket rate-Risk free rate)

14.48=3.42+Beta*(11.6-3.42)
Hence

Beta=(14.48-3.42)/(11.6-3.42)=1.35(Approx)(E).

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