Given the Following Data for a Stock: Risk-Free Rate =

question 10

Multiple Choice

Given the following data for a stock: risk-free rate = 4%; factor-1 beta = 1.5; factor-2 beta
= 0) 5; factor-1 risk-premium = 8%; factor-2 risk-premium = 2%. Calculate the expected rate of return on the stock using the two-factor APT model.

• A) 13%
• B) 17%
• C) 10%
• D) none of the above

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Definitions:

Free-Rein Style

A leadership approach where team members are given significant autonomy and decision-making power with minimal supervision.

Organizational Climate

The underlying atmosphere or environment within an organization, shaped by its members' attitudes, behaviors, and standards.

Coercive Power

A form of authority or influence that is based on the ability to punish or impose penalties.

Power

The ability or capacity to influence or control the behavior of others, the course of events, or access to resources.