Assume That the Risk-Free Rate Is 5

question 55

Multiple Choice

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

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

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Definitions:

Indirect Contact

The spread of disease through touching surfaces or objects contaminated by an infected person, instead of direct physical contact.

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Small, parasitic worms that infect the intestines, especially in children, causing itching and discomfort around the anus.

Sterile Package

Packaging that has been treated to ensure it is free of microorganisms, used for medical instruments and supplies to maintain asepsis.

Dry Heat Oven

A type of equipment used to sterilize medical and laboratory instruments through the application of high temperature without moisture.