Stock J Has a Beta of 1

question 64

Multiple Choice

Stock J has a beta of 1.06 and an expected return of 12.3 percent, while Stock K has a beta of .74 and an expected return of 6.7 percent.If you create portfolio with the same risk as the market, what rate of return should you expect to earn?

• A)10.67 percent
• B)11.18 percent
• C)11.62 percent
• D)11.25 percent
• E)11.13 percent

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Definitions:

Balanced Scorecard Framework

A strategic planning and management system used to align business activities with the vision and strategy of the organization, improve internal and external communications, and monitor organizational performance.

Strategic Initiatives

Long-term plans or actions taken by a business to achieve its goals and improve its competitive position.

CSR Efforts

Initiatives taken by a company to assess and take responsibility for its effects on environmental and social well-being, often going beyond compliance and engaging in actions that further social good.

Corporate Headquarters

The main office or central administration point of a company where key managerial decisions are made.