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What Is the Expected Return of a Zero-Beta Security

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What is the expected return of a zero-beta security?


Definitions:

Preferred Equity

A type of equity which is ranked higher than common stock and usually has fixed dividend payments.

Common Equity

Common equity represents the ownership interest in a company held by common shareholders, as reflected in the company's equity capital.

Lowest Terms

The simplest form of a fraction, where the numerator and denominator are reduced to their smallest values through common factor division.

Ratio

A ratio indicating how often one number can encompass or be encompassed by another value.

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