Assume That the Risk-Free Rate Remains Constant, but the Market

question 115

Multiple Choice

Assume that the risk-free rate remains constant, but the market risk premium declines. Which of the following is most likely to occur?

• A) The required return on a stock with beta > 1.0 will increase.
• B) The return on the market will remain constant.
• C) The return on the market will increase.
• D) The required return on a stock with beta < 1.0 will decline.

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Definitions:

Paid Labour Force

Individuals who work for a salary or wages, contributing to economic production or services in exchange for financial compensation.

Theoretical Perspective

A conceptual framework used to analyze and explain phenomena, guiding how data is collected and interpreted.

Gender

A social construct that involves the roles, behaviors, activities, and attributes that a given society considers appropriate for men and women.

Hegemonic Masculinity

The dominant form of masculinity that is culturally emphasized and valued, often at the expense of subordinating other genders and masculinities.