You Own a Stock That Has an Expected Return of 15.72

question 30

Multiple Choice

You own a stock that has an expected return of 15.72 percent and a beta of 1.33.The U.S.Treasury bill is yielding 3.82 percent and the inflation rate is 2.95 percent.What is the expected rate of return on the market?

• A)12.07 percent
• B)12.77 percent
• C)13.64 percent
• D)14.09 percent
• E)13.42 percent

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Definitions:

Amino Acid

Organic compounds that serve as the building blocks of proteins, containing both amine and carboxyl functional groups.

Imidazole Ring

A heterocyclic compound containing a ring made of three carbon atoms and two nitrogen atoms, found in many biologically important molecules.

Side Chain

A group of atoms attached to the main part of a molecule and having a composition and structure independent of the molecule's primary structure.

Amino Acid

Organic compounds containing an amine (-NH2) and a carboxyl (-COOH) functional group, along with a side chain; they are the building blocks of proteins.