The Markets in General Are Paying a 2% Real Rate

question 81

Multiple Choice

The markets in general are paying a 2% real rate of return. Inflation is expected to be 3%. ABC share commands a 6% risk premium. What is the expected rate of return on ABC share?

• A) 11%.
• B) 5%.
• C) 8%.
• D) 2%.

---

Definitions:

Distress-Maintaining

This term refers to behaviors or thought patterns that exacerbate or prolong emotional distress rather than alleviating it.

Internal Attributions

The process of explaining one's own or others' behaviors and outcomes as being caused by internal, personal factors.

External Attributions

External attributions are explanations for a person's behavior that refer to outside causes, such as other people's actions or environmental factors, rather than internal states.

Investment Model

A theory in social psychology that examines how commitment in relationships is determined by satisfaction, quality of alternatives, and the level of investment one has put into the relationship.