The risk premium for exposure to aluminum commodity prices, Financial Management

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The risk premium for exposure to aluminum commodity prices

The risk premium for exposure to aluminum commodity prices is 4%, and the firm has a beta relative to aluminum commodity prices of .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%, what is the expected return on this stock?

A. 14.4 percent

B. 10.0 percent

C. 13.6 percent

D. 11.5 percent

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Financial Management: The risk premium for exposure to aluminum commodity prices

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