Asset Y Has a Beta of 1

question 19

Multiple Choice

Asset Y has a beta of 1.2. The risk- free rate of return is 6%, while the return on the market portfolio of assets is 12%. The asset's market risk premium is

• A) 10 %
• B) 6.0%
• C) 7.2%
• D) 13.2%

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Definitions:

Geographical

Pertaining to the nature and relative arrangement of places and physical features on Earth.

Centralization

the concentration of decision-making authority and power at the top levels of an organization's hierarchy.

Competitive Advantage

An attribute that allows an organization to outperform its competitors, often leading to greater sales, margins, and retention of customers.

Focused Strategy

A business approach that targets a particular market niche or demographic with specialized products or services to gain competitive advantage.