A Security Has an Expected Rate of Return of 0

question 20

Multiple Choice

A security has an expected rate of return of 0.15 and a beta of 1.25. The market expected rate of return is 0.10, and the risk-free rate is 0.04. The alpha of the stock is

• A) 1.7%.
• B) −1.7%.
• C) 8.3%.
• D) 3.5%.

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Definitions:

Oxygen Saturation

A measure of the amount of oxygen carried by red blood cells in the bloodstream, typically determined by pulse oximetry.

Glomerular Filtration Rate

A measure of how well the kidneys filter wastes and excess fluid from the blood.

Older-Adult Patient

An individual, typically aged 65 years or older, receiving medical treatment or care.

Arterial Walls

The layered structure of arteries, consisting of the intima, media, and adventitia, responsible for blood flow and pressure control.