Question: Consider the CAPM model. The return on stock APR is 15%. The market index has a risk premium of 12% and a standard deviation of

  1. Consider the CAPM model. The return on stock APR is 15%. The market index has a risk premium of 12% and a standard deviation of 14%. The T-bill rate is 2%. The covariance between APR and the market index is ____.

    A.

    0.0255
    B.

    0.1820
    C.

    0.1735
    D.

    0.0212

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