Suppose the Common Stock of United Industries Has a Beta

question 20

Multiple Choice

Suppose the common stock of United Industries has a beta of 1.28 and an expected return of 15.47 percent. The risk-free rate of return is 3.7 percent while the inflation rate is 4.2 percent. What is the expected market risk premium?

• A) 7.02 percent
• B) 9.20 percent
• C) 10.63 percent
• D) 11.22 percent
• E) 11.60 percent

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Definitions:

Loud Stimulus

A sound or noise of high decibel level that triggers a sensory response.

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Overcrowding

A situation where more people are situated within a space than is comfortable, safe, or desirable.

Social Interactions

The processes by which individuals act and react in relation to others, including communication, influence, and relationship building.