The Risk-Free Rate of Return Is 2

question 41

Multiple Choice

The risk-free rate of return is 2.7 percent, the inflation rate is 3.1 percent, and the market risk premium is 6.9 percent. What is the expected rate of return on a stock with a beta of 1.08?

• A) 10.92 percent
• B) 10.15 percent
• C) 12.22 percent
• D) 11.47 percent
• E) 11.79 percent

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Definitions:

Pull-Type Clutch

Any clutch that pulls the release bearing toward the transmission to release it.

Clutch Pedal Free Travel

The distance that a clutch pedal can be depressed before the clutch disengagement mechanism starts to operate.

Internal Adjusting Ring

A component inside a mechanism, such as a bearing or a brake, that can be tightened or loosened to adjust the function or fit of the mechanism.

External Linkage Rod

A rod or bar used outside of a mechanism or system to connect two parts, allowing for movement or transmission of force.