The Expected Return for Zbrite Stock Calculated Using the CAPM

question 82

Multiple Choice

The expected return for Zbrite stock calculated using the CAPM is 15.5%.The risk free rate is 3.5% and the beta of the stock is 1.2.Calculate the implied market risk premium.

• A) 5.5%
• B) 6.5%
• C) 10.0%
• D) 15.5%
• E) 12.0%

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Definitions:

Psychodynamic

A psychological perspective focusing on how unconscious processes and past experiences shape behaviors and emotions.

Life Span

The maximum duration of life of a species; in humans, it also refers to the individual's journey from birth to death.

Behaviorism

The science of behavior that focuses on observable behavior only.

Life-Span Developmental

The study of how humans grow, change, and develop throughout their entire life, from birth to death.