According to the Capital Asset Pricing Model, Which of the Following

question 34

Multiple Choice

According to the capital asset pricing model, which of the following stocks should have the highest required rate of return? $\begin{array}{c}\begin{array}{lll}\underline{\text {Stock Name}}\\\text {Alpha Autom obiles}\\\text {Beta Electronics}\\\text {Omega Foods}\end{array}\begin{array}{c}\underline{\text { Standard Deviation }} \\19.0 \% \\28.0 \\8.0 \end{array}\begin{array}{c}\underline{\text { Beta}} \\1.8\% \\1.1 \\0.7\end{array}\end{array}$

• A)Beta Electronics because its standard deviation is highest.
• B)Alpha Automobiles because its beta coefficient is highest.
• C)Omega foods because the ration of standard deviation/beta is the lowest.
• D)Not enough information is given to answer this question.

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Definitions:

Length

The measurement of something from end to end; the longest dimension of an object.

Groove Weld

A type of weld used to join two pieces of metal along the edges by depositing a weld metal groove between them.

Weld Symbol

A standardized symbol placed on drawings to specify the type, size, and other details of a weld.

Square Weld

A type of weld joint made at a right angle between two parts, ensuring strong structural integrity.