The Common Stock of Industrial Technologies Has an Expected Return

question 19

Multiple Choice

The common stock of Industrial Technologies has an expected return of 12.4%. The market return is 9.2% and the risk-free return is 3.87%. What is the stock's beta?

• A).42
• B)1.00
• C)1.32
• D)1.42
• E)1.60

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Definitions:

Current Yield

Current yield is the annual income (interest or dividends) earned from an investment, expressed as a percentage of the current market price of the investment.

Call Premium

The amount by which the price of a call option exceeds its intrinsic value; essentially, the extra cost for the right to buy a stock at a set price.

Early Redemption

The process of repaying a debt or obligation before its official due date, which may involve a penalty or premium.

Bondholder

An investor or owner of bond securities who has lent money to the issuing entity, such as a corporation or government.