The Risk-Free Rate and the Expected Market Rate of Return

question 31

Multiple Choice

The risk-free rate and the expected market rate of return are 0.056 and 0.125, respectively.According to the capital asset pricing model (CAPM) , the expected rate of return on a security with a beta of 1.25 is equal to

• A)0.142.
• B)0.144.
• C)0.153.
• D)0.134.

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Definitions:

Soft Spots

Areas on an infant's skull where the bones have not yet fused, formally known as fontanelles, allowing the head to be flexible during birth and growth.

Tough Cartilage

A type of strong, flexible connective tissue found in various parts of the body, such as joints, acting as a cushion and providing structural support.

Juvenile Rheumatoid Arthritis

A type of arthritis that affects children under the age of 16, characterized by inflammation, pain, and stiffness in joints.

Neonatal Jaundice

A common condition in newborns characterized by yellowing of the skin and eyes due to a high level of bilirubin, a pigment in the blood.