A Stock with a Beta of Zero Would Be Expected

question 1

Multiple Choice

A stock with a beta of zero would be expected to:

• A) have a rate of return equal to the risk-free rate.
• B) have a rate of return equal to the market rate.
• C) have a rate of return equal to zero.
• D) have a rate of return equal to the one.

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Definitions:

Retailing

The process through which companies sell products and services to consumers for their personal or family use.

Full-Service

Pertaining to businesses or services that offer a comprehensive range of solutions or amenities to their customers, leaving no need unaddressed.

Limited-Service

Refers to businesses or offerings that provide a selective range of services as opposed to comprehensive, full-service options.

Merchant Wholesalers

Businesses that buy goods in large quantities from producers, store them, and then resell them to retailers or other businesses.