What Return Would You Expect If the Risk- Free Rate

question 21

Multiple Choice

What return would you expect if the risk- free rate of return was 5 per cent, the beta risk is 1.5, and the historical risk premium has been 6 per cent? (Base you calculation on the capital asset pricing model.)

• A) 14%
• B) 13.5%
• C) 11%
• D) 16.5%

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Definitions:

Diels-Alder Reaction

A chemical reaction between a conjugated diene and a substituted alkene (dienophile) to form a cyclohexene derivative, often used in the synthesis of complex natural products.

Cyclization

A chemical reaction that transforms a linear molecule into a cyclic one by forming a ring structure.

Thermal Conditions

Refers to the temperature and heat-related circumstances affecting or controlling a process or reaction.

Symmetry-Allowed

In quantum chemistry, a process or transition is symmetry-allowed if it does not violate symmetry rules governing molecular transformations.