The Average Market Return Is 6 Per Cent and the Risk-

question 43

Multiple Choice

The average market return is 6 per cent and the risk- free return is 4 per cent. If beta for a particular share is 1.5, what is the required rate of return on the shares?

• A) 7%
• B) 6%
• C) 21%
• D) 12%

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Definitions:

African Slaves

People from Africa who were forcibly transported to the New World and sold into slavery, primarily to work on plantations.

Bacon's Rebellion

A 1676 uprising in colonial Virginia, led by Nathaniel Bacon, against the colony's government for its failure to protect settlers from Native American raids.

Virginia

A state located in the Southeastern and Mid-Atlantic regions of the United States, known for its significant contributions to the formation of the nation's history and government.

Puritans

A religious group in the 16th and 17th centuries advocating for purification of the Church of England from Roman Catholic practices.