A Stock Has an Expected Return of 15

question 36

Multiple Choice

A stock has an expected return of 15.10% and a beta of 1.30. What is the risk-free rate if the market rate is 13.1%?

• A)6.43%
• B)6.92%
• C)7.01%
• D)7.30%
• E)7.90%

---

Definitions:

RUPA

The Revised Uniform Partnership Act, which is legislation that provides a legal framework for the operation of partnerships within the United States.

Implied Authority

Authority of an agent that is not explicitly stated but is assumed to be granted in order to perform acts necessary to fulfill the purpose of an agency relationship.

Winding Up

The process of concluding a company’s operations, settling its liabilities, and distributing remaining assets to shareholders.

Novation

The act of replacing an existing contract with a new one, where a new party takes over rights and obligations that were originally held by one of the initial parties.