A stock with a beta of zero would be expected to have a rate of return equal to:
-the risk-free rate.
-the market rate.
-the prime rate.
-the market rate less the risk-free rate.
-zero.
Expected return = Risk free rate + ( market rate - risk free rate ) * beta
Putting beta = zero
We get,
Expected return = the Risk free rate
A stock with a beta of zero would be expected to have a rate of return...
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