The Expected Return for a Stock,calculated Using the CAPM,is 25

question 16

Multiple Choice

The expected return for a stock,calculated using the CAPM,is 25%.The risk free rate is 7.5% and the beta of the stock is 0.80.Calculate the implied return on the market.

• A) 7.50%
• B) 13.91%
• C) 17.50%
• D) 21.88%
• E) 14.38%

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Definitions:

Public Sector Accounting Board

A regulatory body responsible for setting accounting standards and financial reporting guidelines for public sector entities.

External Parties

Individuals or organizations that are not part of a company but have an interest or interaction with it, such as customers, suppliers, or regulators.

Government Business Organization

An entity directly operated by the government that engages in commercial activities, often with a public service or economic objective.

Non-Business Government Organization

An entity that operates within the government framework but is not focused on commercial or business activities, often tasked with policy implementation or service provision.