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A Stock Has an Expected Return of 14

question 60

Multiple Choice

A stock has an expected return of 14.3 percent, the risk-free rate is 3.9 percent, and the market risk premium is 7.8 percent.What must the beta of this stock be?

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Definitions:

Percentage

A proportion or share in relation to a whole, represented as a number out of 100.

Receivables Basis

An accounting method that recognizes revenue when related receivables are actually or constructively received.

Allowance Account

A contra account related to accounts receivable that represents the estimate of receivables that are likely to be uncollectible.

Allowance Account

A contra-asset account used to estimate and offset losses from potentially uncollectible accounts receivable.

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