According to the Capital Asset Pricing Formula, If the Risk

question 2

Multiple Choice

According to the Capital Asset Pricing Formula, if the risk free rate is 3%, the market rate of return is 6%, and Beta = .6, what is the required rate of return on the asset?

• A)4.8%
• B)6%
• C)3.6%
• D)3%

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Definitions:

Compound

A substance formed from the chemical combination of two or more elements in a fixed ratio.

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Compound

A substance made up of two or more different elements joined by chemical bonds in a fixed ratio, possessing unique properties different from its component elements.

Acetic Acid Dimer

A molecule formed by the combination of two acetic acid molecules, often through hydrogen bonding.