Asset a Has a Reward to Risk Ratio Of

question 24

Multiple Choice

Asset A has a reward to risk ratio of.075 and a beta of 1.5. The risk-free rate is 5%. What is the expected return on A?

• A) 11.25%
• B) 12.25%
• C) 13.50%
• D) 14.25%
• E) 16.25%

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Definitions:

Mentally Competent

A condition or status indicating that an individual possesses the cognitive ability to make informed decisions or understand the significance of actions.

Life-Threatening Illness

A disease or condition that poses a serious risk to an individual's life if not treated promptly.

Residuary Clause

A provision in a will that designates where the remainder of the estate goes after specific gifts are distributed.

Durable Power of Attorney

A legal document that grants an individual the authority to act on another person's behalf in legal and financial matters, even if the grantor becomes incapacitated.