Determine the Risk Free Rate If a Company's Rate of Return

question 92

Multiple Choice

Determine the risk free rate if a company's rate of return is 9%, its Beta is 1.8 and the expected return on the stock market is 10%.

• A)11.25%
• B)12.25%
• C)13.25%
• D)14.25%

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Definitions:

Aluminum Chloride

A chemical compound with the formula AlCl3, widely used in the chemical industry as a catalyst and as a component in a variety of chemical reactions.

O,p-director

Substituents in aromatic substitution reactions that direct incoming substituents to the ortho and para positions relative to themselves.

Hydroxyl Group

A functional group consisting of an oxygen atom covalently bonded to a hydrogen atom (-OH), found in alcohols and phenols.

Rate Determining

Describes the slowest step in a chemical reaction that determines the overall rate at which the reaction proceeds.