market

问题如下：

An analyst gathers the following information:

With respect to the capital asset pricing model, if the expected market risk premium is 6% and the risk-free rate is 3%, the expected return for Security 1 is closest to:

选项：

A.

9.0%.

B.

12.0%.

C.

13.5%.

解释：

B  is correct.

The expected return of Security 1, using the CAPM, is 12.0% = 3% + 1.5(6%); E(R_i) = R_f + β_i[E(R_m)–R_f].