If Left Bank Stock Has a Beta of 1

question 69

Multiple Choice

If Left Bank stock has a beta of 1.25,the return from the market portfolio is 15%,and the Treasury bill return is 5%,what is the required return from the stock?

• A) 17.5%
• B) 12.5%
• C) 16.0%
• D) 7.5%
• E) 15.0%

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Definitions:

Consolidation Adjustment Entries

are journal entries made in the preparation of consolidated financial statements to eliminate transactions between entities within the same group, ensuring accurate representation of financials as if the group was a single entity.

Intragroup Transactions

Financial transactions that occur between enterprises under common control, typically within the same corporate group.

Ownership Interest

The legal rights and claims a person or entity has over property or a company, often evidenced by shares or other forms of equity.

Non-controlling Interest

A portion of equity ownership in a subsidiary not owned by the parent company, representing a minority interest's share in the subsidiary's net assets and earnings.