Find Beta, and Determine the Required Rate of Return A) 1261%
B) 8

question 37

Multiple Choice

Find beta, and determine the required rate of return. The market risk premium is 12%, and the risk-free rate is 5%. ? $$\begin{array} { | l | l | } \hline \text { Comparative Returns in the Market } & \text { Returns on the Stock } \\\hline 8 \% & 4 \% \\\hline 9 \% & 10 \% \\\hline 2 \% & 1 \% \\\hline 10 \% & 6 \% \\\hline\end{array}$$

• A) 12.61%
• B) 8.27%
• C) 10.11%
• D) 14.84%

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Definitions:

Cost Minimizing

The strategy or process of reducing expenses to the lowest possible level while maintaining the desired level of production quality or service.

Inputs

The resources such as labor, materials, and capital used in the production process.

MRTS

Marginal Rate of Technical Substitution, indicating how much of one input can be reduced when one more unit of another input is used, keeping output constant.

MRTS

Marginal Rate of Technical Substitution; the rate at which one input can be reduced for every increase in another input while maintaining the same level of output.