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Determine the expected return on this stock

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Reference no: EM1310093

The risk premium for exposure to aluminum commodity prices is 4% and the firm has a beta relative to aluminum commodity prices of 0.6. The risk premium for exposure to GDP changes is 6% and the firm has a beta relative to GDP of 1.2. If the risk free rate is 4.0%, what is the expected return on this stock?

A) 10.0%

B) 11.5%

C) 13.6%

D) 14.0%

Reference no: EM1310093

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