The Expected Rate of Return on Rooter Industries Is 1

question 67

Multiple Choice

The expected rate of return on Rooter Industries is 1.5 times the 16 percent expected rate of return from the market. What is Research's beta if the risk-free rate is 8 percent?

• A) 2
• B) 3
• C) 4
• D) 5
• E) 6

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Definitions:

PHStat

An Excel add-in designed to perform statistical analysis.

Index Fund

A mutual fund or ETF aimed at mirroring the performance of a particular market index.

Day Trader

An individual who buys and sells securities within the same trading day, often taking advantage of small price moves.

Investing

The act of allocating resources, usually money, with the expectation of generating an income or profit.