The Return on Treasury Notes Is Expected to Be 7

question 50

Multiple Choice

The return on treasury notes is expected to be 7.5%.The market risk premium is 8%.What is the expected return on a stock with a beta of 1.3?

• A)12.95%
• B)12.35%
• C)7.25%
• D)17.90%

---

Definitions:

Relationship Between Variables

Refers to how one variable may change in relation to alterations in another variable, often measured by statistical tools to understand correlations or dependencies.

Reciprocity

Reciprocity refers to a mutual exchange between two parties, often used in the social sciences to describe social interactions.

Direction

In statistics, it often refers to the nature of the relationship between variables, indicating whether they move together in a positive or negative correlation.

Pearson Correlation

A measure of the linear correlation between two variables, giving a value between -1 and 1.