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Question
The risk-free rate is 3.0 percent and the expected return on the market is 9 percent. Stock A has a beta of 1.20. For a given year, Stock A returned 12.5 percent while the market returned 9.75 percent. The systematic portion of Stock A's unexpected return was _____ percent and the unsystematic portion was _____ percent.A. 0.80; 1.30
B. 0.90; 1.40
C. 1.11; 2.30
D. 1.40; 0.90
E. 4.62; 1.41
Answer
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