A Share with a Beta of Zero Would Be Expected

question 77

Multiple Choice

A share with a beta of zero would be expected to have a rate of return equal to:

• A)the risk-free rate.
• B)the market rate.
• C)the prime rate.
• D)the average AAA bond.
• E)None of the above.

---

Definitions:

Accounts Receivable

Outstanding payments that customers are required to make to a business for received goods or services.

Bad Debt Risk

The risk associated with the possibility that a debtor will not fulfill their obligations as outlined in the terms and conditions.

Commercial Paper Instruments

Short-term unsecured promissory notes issued by companies to finance their immediate cash needs.

Prime Rate

The interest rate banks charge their largest and best commercial customers.