What Will Happen to the Expected Return on a Stock

question 11

Multiple Choice

What will happen to the expected return on a stock with a Beta of 1.5 and a market risk premium of 9% if the Treasury bill yield increases from 3% to 5%?

• A)the expected return will remain unchanged
• B)the expected return will increase by 1.0%
• C)the expected return will increase by 2.0%
• D)the expected return will increase by 3.0%

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Definitions:

Mesoderm

The middle layer of an embryo from which muscles, bones, and circulatory systems develop.

Apical Ectodermal Ridges

Raised areas of ectodermal cells at the tips of developing limbs in embryos, crucial for the regulation of limb formation.

Somitomeres

The early divisions of mesodermal tissue in the developing embryo that eventually form somites, contributing to the vertebral column, rib cage, and skeletal muscles.

Coelom

A fluid-filled body cavity found in most multicellular animals, situated between the intestinal canal and the body wall.