While examining the current economic outlook we observe, Ask an Expert

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While examining the current economic outlook, we observe that the risk-free rate is 2% and the market risk premium is 4%. Given this information, which of the following statements is CORRECT?

A-If a stock's beta doubles, its required return must also double.

B-An index fund with beta = 1.0 should have a required return less than 6%.

C-An index fund with beta = 1.0 should have a required return greater than 6%.

D-An index fund with beta = 1.0 should have a required return of 6%.

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Financial Management, Finance

Category:- Financial Management
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