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 greater risk than the average market risk.
B . It has lower risk than the average market risk.
C . It has the same risk as the average market risk.
D . It is not possible to tell from CAP
Answer: A