Elephant Company Common Stock Has a Beta of 1

question 70

Multiple Choice

Elephant Company common stock has a beta of 1.2. The risk-free rate is 6%, and the expected market rate of return is 12%. Determine the required rate of return on the security.

• A) 7.2%
• B) 14.4%
• C) 19.2%
• D) 13.2%

---

Definitions:

Track Progress

The process of monitoring and recording the development or performance of a project, work, or a specific task over time.

Sales Proposal

A document or presentation that outlines the offer, including product or service descriptions, pricing, and benefits, to persuade a buyer towards a sale.

Status Indicator

Visual cues or symbols in software that display the current status of operations, connectivity, or other conditions.

Waiting On Someone Else

A situation or status indicating that the progression or completion of a task relies on action from another person.