Consider the CAPM

question 74

Multiple Choice

Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a beta of 1.2 is 20%. What is the risk-free rate?

• A) 2%
• B) 6%
• C) 8%
• D) 12%

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Definitions:

Financial Budgets

Detailed plans that outline an organization's financial goals and the strategies to achieve them, including projections of income, expenses, and cash flow.

Operating Budgets

An operating budget details the forecasted revenue and expenses for the day-to-day operations of a company for a specific period.

Long-range Planning

Long-range Planning involves setting goals and determining strategies for achieving them over an extended period, often three to five years into the future, to guide sustainable business growth.

Long-range Plans

Strategic plans that encompass a broad vision and long-term goals of an organization, typically extending several years into the future.