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NEW QUESTION: 1
Using the CAPM, the expected return for a company is 11%. The market return is 8% and the risk free rate is 2%.
What does the beta factor used in this calculation indicate about the risk of the company?
A. It has the same risk as the average market risk.
B. It has greater risk than the average market risk.
C. It is not possible to tell from CAPM.
D. It has lower risk than the average market risk.
Answer: B

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