Mulherin's Stock Has a Beta of 1

question 68

Multiple Choice

Mulherin's stock has a beta of 1.23,its required return is 11.75%,and the risk-free rate is 4.30%.What is the required rate of return on the market? (Hint: First find the market risk premium.)

• A)10.36%
• B)10.62%
• C)10.88%
• D)11.15%
• E)11.43%

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Definitions:

Relationship Satisfaction

The degree to which individuals feel fulfilled and content within their romantic, familial, or platonic relationships.

Constant

A situation or state of affairs that does not change.

Investment Model

Theory that uses three factors—satisfaction, alternatives, and investments—to explain why people stay with their long-term relationship partners.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not influence future decisions but often do.