Zelo NV Share Has a Beta of 1

question 22

Multiple Choice

Zelo NV share has a beta of 1.23.The risk-free rate of return is 4.5% and the market rate of return is 10%.What is the amount of the risk premium on Zelo shares?

• A)4.47%
• B)5.50%
• C)5.54%
• D)6.77%
• E)12.30%

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Definitions:

Food Stamps

Government-issued vouchers that allow individuals to purchase groceries, aimed at assisting those in low-income households.

Median Household Income

The income amount that divides households into two equal groups, half having income above that amount and half having income below that amount.

Mean Household Income

The average income across all households.

Negative Income Tax

A government program that supplements the income of low-income working families.