Stock XYZ Has a Beta of 1

question 6

Multiple Choice

Stock XYZ has a beta of 1.6 and a required rate of return of 15.75%.What is the risk-free rate if the market rate of return is 12%?

• A)3.25%
• B)3.75%
• C)4.50%
• D)5.75%

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Definitions:

Ego-idealizations

The process of constructing ideals or perfect versions of oneself that the ego aspires to achieve, often influenced by personal values and societal expectations.

Trust versus Mistrust

A stage in Erik Erikson's theory of psychosocial development where an infant learns to trust or mistrust their caregivers and the world based on their experiences of consistency and care.

Oral Stage

A phase in Freud's psychosexual development theory focusing on an infant's pleasure centers around the mouth.

Psychosocial Development

A theory formulated by Erik Erikson that describes the impact of social experience across the whole lifespan.