Risk-Free Rate of Interest on Govt. Treasury Bonds 5%, Average Return on Market Portfolio 17.5%. What must be the beta, if the security is correctly priced with actual return of 25%?

CS Executive · Corporate and Management Accounting · PYQS · December 2020
Risk-Free Rate of Interest on Govt. Treasury Bonds 5%, Average Return on Market Portfolio 17.5%. What must be the beta, if the security is correctly priced with actual return of 25%?
(A) 1.2
(B) 1.3
(C) 1.5
(D) 1.6

Answer & Explanation:

Correct Answer: Option (D)

Official answer key: (D).

Topics: Financial Management

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