Asset a Has a Reward to Risk Ratio Of

question 24

Multiple Choice

Asset A has a reward to risk ratio of.075 and a beta of 1.5. The risk-free rate is 5%. What is the expected return on A?

• A) 11.25%
• B) 12.25%
• C) 13.50%
• D) 14.25%
• E) 16.25%

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Definitions:

Herbicide

Chemical substances used to destroy or inhibit the growth of unwanted plants, weeds, or vegetation.

Fungicide

Chemical substances used to kill or inhibit the growth of fungi and fungal spores, commonly used in agriculture to prevent or control fungal diseases.

Chlorinated Hydrocarbons

A group of chemical compounds that contain chlorine, carbon, and hydrogen, used in industry and agriculture, and known for their persistence in the environment.

Aldrin

A potent insecticide that has been banned in many countries due to its toxic effects on wildlife and potential harm to human health.