A Stock Has a Beta Of

question 60

Multiple Choice

A stock has a beta of.8 and an expected return of 6%. The risk-free rate is 3%. What is the expected return on the market?

• A) 3.50%
• B) 3.75
• C) 4.50%
• D) 5.25%
• E) 6.75%

---

Definitions:

Continuing Operations

The segments of a business expected to continue operating and providing net income for the foreseeable future.

Maturity Date

The date on which the principal amount of a loan, bond, or other financial instrument becomes due and payable.

Market Rate

The prevailing interest rate available in the marketplace for instruments of similar risk and maturity or the current price of a market-traded security.

Covenants

Agreements or clauses within financial contracts that impose certain conditions or restrictions on the parties involved.