Assume That the Risk-Free Rate Is 5

question 63

Multiple Choice

Assume that the risk-free rate is 5%.Which of the following statements is CORRECT?

• A) If a stock has a negative beta,its required return under the CAPM would be less than 5%.
• B) If a stock's beta doubled,its required return under the CAPM would also double.
• C) If a stock's beta doubled,its required return under the CAPM would more than double.
• D) If a stock's beta were 1.0,its required return under the CAPM would be 5%.
• E) If a stock's beta were less than 1.0,its required return under the CAPM would be less than 5%.

---

Definitions:

Woman-Woman Marriage

A cultural practice in which a woman assumes the social role of a husband to another woman, often for purposes of lineage or inheritance, observed in some African societies.

Nandi

An ethnic group located in Kenya, known for their agricultural practices, cattle-herding, and significance in Kenyan history and society.

Fraternal Polyandry

A marital arrangement involving two or more brothers who are married to the same wife, typically found in certain societies as a cultural strategy to limit population growth or preserve family land.

Adaptive Value

The usefulness of a trait or behavior in helping an organism survive and reproduce within its environment.