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:

Trust-Busting Laws

Legislation intended to break up monopolies and trusts by promoting fair competition, notably employed by the U.S. government in the early 20th century.

Direct Primary

A direct primary is an election within a party to choose candidates for the general election, allowing party members to vote directly for their preferred nominee.

The Recall

A procedure that allows citizens to remove and replace a public official before the end of their term of office.

The Passing

The process or act of moving through or beyond an obstacle, or the act of deceiving by presenting oneself as someone or something else.