You Are Holding a Stock with a Beta of 2

question 20

Multiple Choice

You are holding a stock with a beta of 2.0 that is currently in equilibrium. The required rate of return on the stock is 15% versus a required return on an average stock of 10%. Now the required return on an average stock increases by 30.0% (not percentage points) . The risk-free rate is unchanged. By what percentage (not percentage points) would the required return on your stock increase as a result of this event?

• A) 36.10%
• B) 38.00%
• C) 40.00%
• D) 42.00%
• E) 44.10%

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Definitions:

Families

Groups of related individuals, often living together, who provide emotional, economic, and social support to each other.

Challenges

Difficulties that require a person or group to engage in effort and determination to achieve a goal or overcome a problem.

Special Education Law

Legal statutes and regulations that ensure children with disabilities receive tailored educational services and accommodations.

PL 94-142

The Education for All Handicapped Children Act of 1975, which mandates public schools to provide free and appropriate education to children with disabilities.