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:

Productive Workers

Individuals who efficiently and effectively complete tasks and contribute significantly to achieving organizational goals.

Affective Commitment

The emotional attachment an employee feels towards their organization, which influences their willingness to remain part of it.

Pay System

The methods and principles employed by an organization to compensate its employees, including salaries, bonuses, and benefits.

Job Dissatisfaction

A negative emotional response towards one's job due to an unmet expectation or negative aspect of the work environment.