The Risk-Free Rate Is 4

The risk-free rate is 4.0% and the expected return on the market is 8%. Stock A has a beta of 1.35. For a given year, Stock A returned 12.0% while the market returned 8.80%. The systematic portion of Stock A's unexpected return was ________% and the unsystematic portion was ________%.

A) .80; 1.30
B) .90; 1.40
C) 1.08; 1.52
D) 1.40; .90
E) 4.62; 1.41

Correct Answer:

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