Financial Accounting The expected return on the market is 10%, the risk-free rate is5% and Black Magic Cosmetics Inc. has a beta of -1.What is the expected return for Black Magic Cosmetics Inc.?A. -10%B. -5%C. 0%D. 5%E. 7.5%

How to calculate the expected return for Black Magic Cosmetics Inc. using the Capital Asset Pricing…

Answered: The expected return on the market is…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The expected return on the market is 10%, the risk-free rate is 5% and Black Magic Cosmetics Inc. has a beta of -1. What is the expected return for Black Magic Cosmetics Inc.? A. -10% B. -5% C. 0% D. 5% E. 7.5%