The Expected Rate of Return on Research Industries Is Twice

question 199

Multiple Choice

The expected rate of return on Research Industries is twice the 12 percent expected rate of return from the market. What is Research's beta if the risk-free rate is 6 percent?

• A) 2
• B) 3
• C) 4
• D) 5
• E) 6

---

Definitions:

Interest Cost

The total expense for borrowing money, typically expressed as an annual percentage of the loan amount.

Actuarially Assumed

Actuarially assumed involves estimations or calculations made based on actuarial methods, often related to insurance or pensions, to predict future obligations or costs.

Defined Contribution Pension Plan

A retirement plan where an employer, employee or both make contributions, with future benefits dependent on investment performance.

IRS Approved

Indicates that a financial arrangement or practice has been sanctioned or recognized by the Internal Revenue Service.