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%

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Definitions:

Dividend Reinvestment Plans

Programs that allow investors to automatically reinvest their cash dividends into additional shares or fractional shares of the underlying stock.

Open Market

A freely competitive market where buyers and sellers can engage in transactions with minimal government intervention.

Debt Ratio

A financial ratio that measures the extent of a company's or individual's leverage in relation to the assets they own.

Transaction Costs

Expenses incurred when buying or selling securities, including commissions and the bid-ask spread.