A SECURITY HAS A BETA OF 1.30. IF THE RISK-FREE RATE OF INTEREST...

109. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM AFTERNOON VERSIONB QUESTIONS 2014
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM AFTERNOON VERSIONB QUESTIONS 2014

109. A security has a beta of 1.30. If the risk-free rate of interest is 3% and the expected return of the

market is 8%, based on the capital asset pricing model (CAPM), the expected return of the security

is closest to:

A. 9.5%.

B. 6.5%.

C. 13.4%.