Assume That the Risk-Free Rate Is 5

question 63

Multiple Choice

Assume that the risk-free rate is 5%.Which of the following statements is CORRECT?

• A) If a stock has a negative beta,its required return under the CAPM would be less than 5%.
• B) If a stock's beta doubled,its required return under the CAPM would also double.
• C) If a stock's beta doubled,its required return under the CAPM would more than double.
• D) If a stock's beta were 1.0,its required return under the CAPM would be 5%.
• E) If a stock's beta were less than 1.0,its required return under the CAPM would be less than 5%.

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Definitions:

Negative Information

Data or facts that present an unfavorable or pessimistic perspective about something or someone.

Condolence Messages

Messages of sympathy and support sent to someone who is grieving the loss of a loved one.

Compositional Mode

A method or style of presenting information in written or artistic form.

Promotional Efforts

Activities aimed at increasing the visibility and sales of a product or service through marketing and advertising strategies.