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%.

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Definitions:

Industrial

Pertaining to the production of goods in factories through the use of machinery and labor.

Consumer Sectors

Divisions within an economy that consist of businesses and industries which produce goods and services specifically for personal and household consumption.

LULAC

The League of United Latin American Citizens, a Latino civil rights organization formed in 1929, focused on combating inequality and discrimination faced by Hispanics in the United States.

NAACP

The National Association for the Advancement of Colored People, an African-American civil rights organization formed in 1909 to fight prejudice, lynching, and Jim Crow segregation, and to work for the betterment of people of color.