Steam Corp

question 40

Multiple Choice

Steam Corp. has a beta of 1.5. The prevailing risk-free rate is 5 percent, and the annual market return in recent years has been 11 percent. Based on this information, the required rate of return on Steam Corp. stock is ____ percent.

• A)21.5
• B)6.5
• C)16.5
• D)14.0
• E)None of these are correct.

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Definitions:

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A former United States Congressman who was convicted of accepting bribes from defense contractors.