The Expected Return on Joseph's Restaurant's Stock Is 14

question 138

Multiple Choice

The expected return on Joseph's Restaurant's stock is 14.25% while the expected return on the market is 12.38%. The stock's beta is 1.18. What is the risk-free rate of return?

• A) 1.99%
• B) 2.04%
• C) 2.48%
• D) 3.23%
• E) 3.68%

---

Definitions:

Decline

A phase in the product life cycle or market trend where sales or interest starts decreasing over time.

Product Characteristics

Attributes or features that define a product and differentiate it from competitors, including quality, functionality, and design.

Complexity

Refers to the state or quality of being intricate or complicated, often used in various contexts to describe systems, problems, or conditions.

Ancillary Services

Additional services or support provided alongside the primary service or product.