If the Expected Rate of Return on AZNG Is 12

question 74

Multiple Choice

If the expected rate of return on AZNG is 12.72, its beta is 1.09 and the market risk premium is 8%, what is the risk-free rate?

• A) 4.72%
• B) 5.42%
• C) 8.72%
• D) 4.0%

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Definitions:

Self-interest

The pursuit of personal advantages and well-being, often guiding individual economic decisions.

Division of Labor

A method that breaks down the production of a product into a series of specific tasks, each performed by a different worker.

Specialization

The concentration of the productive efforts of individuals or organizations on a limited number of activities, leading to increased efficiency and productivity.

Mass Production

A manufacturing technique that produces large quantities of goods efficiently by using assembly lines or automation technology.