Stock a Has a Required Return of 12 Percent

question 17

Multiple Choice

Stock A has a required return of 12 percent. Stock B has a required return of 15 percent. Assume a risk-free rate of 4.75 percent. Which of the following is a correct statement about the two stocks?

• A) Stock A is riskier.
• B) Stock B is riskier.
• C) The stocks have the same risk.
• D) We would need to know if the markets are efficient to answer this question.

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Definitions:

Ramps

Inclined planes or slopes designed to connect two different levels, facilitating easier movement or access.

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Long seats intended for multiple people, often found in public places or as part of furniture sets.

Compares And Contrasts

The act of identifying similarities and differences between two or more subjects in detail.

Street Skateboarding

A form of skateboarding that involves performing tricks and maneuvers in urban environments and on public structures.