What Is the Expected Return on a Stock with a Beta

question 7

Multiple Choice

What is the expected return on a stock with a beta of 1.09, a market risk premium of 8%, and a risk- free rate of 4%?

• A) 8.72%.
• B) 12.72%.
• C) 8.36%.
• D) 4.36%.

---

Definitions:

Zebra Mussel

An invasive aquatic species known for its rapid population growth and significant impact on freshwater ecosystems and human infrastructure.

Sea Lamprey

A parasitic lamprey native to the Atlantic Ocean, known for its detrimental impact on native fish populations in the Great Lakes where it is an invasive species.

Great Lakes

A group of five large, interconnected freshwater lakes in North America, important for water resources and habitat.

Marine Systems

Complex ecosystems found in oceans and seas that encompass a diverse range of habitats and life forms.