What Is the Required Rate of Return on a Stock

question 78

Multiple Choice

What is the required rate of return on a stock if the risk-free rate is 7%, the return on the market portfolio is 15%, and the beta is 1.5?

• A) 12 %
• B) 19%
• C) 22.5%
• D) 29.5%
• E) 33%

---

Definitions:

Per-unit Standards

Benchmark cost measures for the production of one unit of a product, covering all relevant costs of production.

Gallons

A unit of volume used primarily in the United States to measure liquids.

Materials Variance

The difference between the expected cost of direct materials and the actual cost incurred.

Price Variance

The difference between the actual cost of a good or service and its expected or budgeted cost.