The Expected Return on the Market Portfolio Is 15

question 32

Multiple Choice

The expected return on the market portfolio is 15%.The risk-free rate is 8%.The expected return on SDA Corp.common stock is 16%.The beta of SDA Corp.common stock is 1.25.Within the context of the capital asset pricing model,_________.

• A) SDA Corp. stock is underpriced
• B) SDA Corp. stock is fairly priced
• C) SDA Corp. stock's alpha is -0.75%
• D) SDA Corp. stock alpha is 0.75%

---

Definitions:

Pacemaker Cells

Specialized cells in the heart that control the heart rate by generating and conducting electrical signals.

Heart Rate

The number of heartbeats per unit of time, usually per minute, reflecting the speed at which the heart is beating and pumping blood through the body.

Inspiration

The process of drawing air into the lungs, or a sudden creative idea.

Expiration

The process of exhaling air out of the lungs, a key component of breathing.