Dinner Foods Stock Has a Beta of 1

question 66

Multiple Choice

Dinner Foods stock has a beta of 1.45 and an expected return of 13.43%. Edwards' Meals stock has a beta of .95 and an expected return of 10.27%. Assume that both stocks are correctly priced. Given this, the risk-free rate is ________% and the market rate of return is ________%.

• A)4.02; 11.53
• B)4.09; 12.35
• C)4.10; 11.53
• D)4.27; 10.59
• E)4.41; 10.25

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Definitions:

Developing Countries

Nations with a lower living standard, undeveloped industrial base, and lower Human Development Index relative to other countries.

Life Expectancy

The average number of years a person is expected to live, based on statistical averages.

Crude Death Rate

A measure of the number of deaths in a given population, scaled to the size of that population per unit of time, typically expressed as deaths per 1,000 individuals per year.

Birth Control

Methods or devices used to prevent pregnancy or manage fertility.