Stock X Has a Beta of

question 44

Multiple Choice

Stock X has a beta of .88 and an expected return of 10.8%. Stock Y has a beta of 1.15 and an expected return of 13.1%. What is the risk-free rate of return assuming that both Stock X and Stock Y are correctly priced?

• A)1.10%
• B)1.20%
• C)2.06%
• D)3.30%
• E)3.50%

Recognize the tone suitable for business writing.

Grasp the application of politeness and its significance in business requests.

Distinguish between ethical and unethical practices in business communication.

Develop the ability to critically analyze the content and construct of business messages.

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Definitions:

Maximin Strategy

A strategy in decision-making used under uncertainty, aiming to maximize the minimum gain that can be achieved.

Stackelberg

An economic model of market structure in which one firm sets its output decision first, and other firms follow, establishing a leader-follower dynamic.

Cournot

Refers to an economic model of competition among firms, where each firm decides its production level assuming the other firms' levels are fixed, leading to a state of Cournot equilibrium.

Sequential Games

Games in which players make decisions one after another, with later players having knowledge of the previous actions taken by other players.