The Risk-Free Rate Is 3

question 2

Multiple Choice

The risk-free rate is 3.4% and the expected return on the market is 10.8%. Stock A has a beta of 1.18. For a given year, Stock A returned 13.6% while the market returned 11.8%. The systematic portion of the unexpected return was ________% and the unsystematic portion was ________%.

• A)1.045; .207
• B)1.145; .126
• C)1.180; .288
• D)1.344; 1.443
• E)1.500; 1.449

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Definitions:

Plasma Membrane

A bi-layer of lipids and proteins that surrounds a cell, controlling the entry and exit of substances.

Hyperpolarize

To increase the polarization or difference in electric charge across a membrane, typically making it more negative inside compared to outside.

Na+

Na+, or sodium ion, is an essential electrolyte in the body, playing key roles in fluid balance, nerve signal transmission, and muscle contraction.

K+

The symbol for potassium ions, which are essential for various physiological functions, including nerve signal transmission and muscle contraction.