If a Share Has a Beta Coefficient, $\beta$ ), Equal to 1

question 31

Multiple Choice

If a share has a beta coefficient, ( $\beta$ ) ., equal to 1.20, the risk premium associated with the market is 9 percent, and the risk-free rate is 5 percent, application of the capital asset pricing model indicates the appropriate return should be __________.

• A) 9.8%
• B) 14%
• C) 5%
• D) 15.8%
• E) None of the above is correct.

Understand how marginal cost interacts with average total cost, average fixed cost, and average variable cost.

Comprehend the concept of economies and diseconomies of scale in production.

Understand the law of diminishing returns and its implications for production.

Grasp the difference between short-run and long-run cost behaviors in a firm.

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