A Stock Has an Expected Return of 14

question 23

Multiple Choice

A stock has an expected return of 14.5 percent, the risk-free rate is 4 percent and the return on the market is 11 percent. What is this stock's beta?

• A) 1.5
• B) 3.0
• C) 1.05
• D) 0.94

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Definitions:

Limited Partner

An investor in a partnership who is not directly involved in its daily operations and whose liability is limited to the amount invested.

Capital Contribution

Funds or assets provided by owners or shareholders to increase a company's equity.

Partners' Interests

Refers to the stakes or shares that partners have in a partnership, encompassing financial investment, management decisions, and profit-sharing.

Provincial Legislation

Laws and regulations enacted by the legislative bodies of provinces or states within a country.