The Market Has an Expected Return of 13 Percent and the Risk-Free

question 40

Essay

The market has an expected return of 13 percent and the risk-free rate is 5.5 percent. If Morgan Stanley has a beta of 1.85, what is the required return for Morgan Stanley?

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Definitions:

Hierarchy Of Needs

A theory in psychology proposed by Abraham Maslow that prioritizes human needs from the most basic such as physiological needs, to higher levels of needs such as self-actualization.

Positive Psychology

A branch of psychology focused on the study of positive human functioning and flourishing on multiple levels that include the biological, personal, relational, institutional, cultural, and global dimensions of life.

Hierarchy Of Needs

A psychological motivational theory that describes human needs as a five-level hierarchy represented in the shape of a pyramid.

Self-Determination Theory

Argues that three needs—autonomy, competence, and relatedness—can explain much of human behavior.