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If the required return on an asset is 8

Finance

If the required return on an asset is 8.2%, the risk-free rate is 3.4% and the market risk premium is 9.8%, what value must the asset’s beta take?
Select one:
a. 0.49
b. 0.50
c. 0.59
d. 0.54

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Return from an asset = Risk free Rate + Beta(Market Risk Premium)

8.2% = 3.4% + Beta(9.8%)

8.2% - 3.4% = Beta (9.8%)

4.8% = Beta (9.8%)

4.8% / 9.8% = Beta

0.489 = Beta

So the correct option is "A"

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