A Stock Has a Beta of 1

question 92

Multiple Choice

A stock has a beta of 1.10, an expected return of 12.11 percent, and lies on the security market line.A risk-free asset is yielding 3.2 percent.You want to create a portfolio valued at $12,000 consisting of Stock A and the risk-free security such that the portfolio beta is .80.What rate of return should you expect to earn on your portfolio?

• A)9.68 percent
• B)9.16 percent
• C)9.33 percent
• D)9.41 percent
• E)9.56 percent

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Definitions:

Worker Participation

The involvement of employees in decision-making processes at their workplace, often to improve productivity, morale, and job satisfaction.

Blue-Collar Manual Laborers

Refers to workers who perform manual labor, often in industries that require physical work, such as construction, manufacturing, and maintenance.

Employee Empowerment Unionism

An approach to unionism emphasizing the enhancement of workers' control over their work environment and decision-making processes.

Servicing Model

A model of union activity that emphasizes providing services to members, such as negotiating contracts and addressing grievances, rather than focusing on broader social or political change.