Mulherin's Stock Has a Beta of 1

question 68

Multiple Choice

Mulherin's stock has a beta of 1.23,its required return is 11.75%,and the risk-free rate is 4.30%.What is the required rate of return on the market? (Hint: First find the market risk premium.)

• A)10.36%
• B)10.62%
• C)10.88%
• D)11.15%
• E)11.43%

---

Definitions:

Substitute Product

A good or service that can be used in place of another to satisfy similar needs or desires.

Complements

Products or services that are used together, where the consumption or use of one increases the demand for the other.

Substitutes

Goods or services that can be used in place of each other, satisfying the same needs or desires.

Complements

Products or services that are often used together, such that demand for one increases the demand for the other.