Consider the Following Information on Stocks I and II

question 23

Multiple Choice

Consider the following information on Stocks I and II: The market risk premium is 8 percent, and the risk-free rate is 3.6 percent.The beta of stock I is _____ and the beta of stock II is _____.

• A)2.08; 2.47
• B)2.08; 2.76
• C)3.21; 3.84
• D)4.47; 3.89
• E)4.03; 3.71

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Definitions:

Mortgage

A loan specifically used to purchase real estate, where the property itself serves as collateral for the loan.

Finance Charge

Fees and interest charges associated with the borrowing of money or the extension of credit.

Installments

Periodic payments made towards settling a debt or purchasing a good, spreading out the total cost over a period of time.

Fair Credit Reporting Act

A federal law that regulates the collection, dissemination, and use of consumer credit information to ensure accuracy and privacy.