One Would Expect a Stock with a Beta of Zero

question 6

Multiple Choice

One would expect a stock with a beta of zero to have a rate of return equal to

• A)zero.
• B)the market risk premium.
• C)the risk-free rate.
• D)the market rate of return.

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Definitions:

Compulsion

A psychological condition characterized by the irresistible urge to perform certain actions repeatedly, often associated with obsessive-compulsive disorder.

Unwished-for Images

Intrusive and unwanted visual thoughts or memories that can cause distress, often associated with conditions like PTSD or OCD.

Anxiety

A feeling of worry, nervousness, or unease, typically about an imminent event or something with an uncertain outcome.

Depressed

Experiencing severe despondency and dejection, accompanied by feelings of hopelessness and inadequacy.