A Security Has an Expected Rate of Return of 0

question 14

Multiple Choice

A security has an expected rate of return of 0.12 and a beta of 1.1. The market expected rate of return is 0.09, and the risk-free rate is 0.04. The alpha of the stock is

• A) 9.7%.
• B) 7.7%.
• C) 5.3%.
• D) 2.5%.

Understand the concept of dark fiber and its role in telecommunication infrastructure.

Grasp the impact of the web on competition and profitability in various industries.

Comprehend the process and significance of e-commerce in today's economy.

Distinguish between primary and support activities within a firm and their value addition.

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Definitions:

Compounded Monthly

Interest calculation method where interests earned themselves earn interest, recalculated on a monthly basis.

Interest

The cost of borrowing money or the payment received for deposit funds, usually expressed as a percentage rate over a period of time.

Present Value

Today's equivalent monetary worth of future cash sums or flows, discounted at a specific rate of return.

Ordinary Annuity

A series of equal payments made at regular intervals, with the interest compounded at a fixed rate.