Ming Measures a Recession Velocity of 2000 Km/sec for a Galaxy

question 30

Multiple Choice

Ming measures a recession velocity of 2000 km/sec for a galaxy. About how far away is that galaxy if the Hubble constant is 20 km/sec/million light years? (Hint: be sure to check the units in your calculation.)

• A) 100 light years
• B) 40 billion light years
• C) 100 million light years
• D) 40 thousand light years

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Definitions:

Beta

A measure of a stock's volatility in relation to the overall market; a beta above 1 indicates higher than market volatility.

Market Risk Premium

The extra return over the risk-free rate that investors require to compensate them for the risk of investing in the stock market.

Risk-free Rate

The return on an investment with no risk of financial loss, often associated with government bonds.

Required Return

The minimum expected yield by investors for providing capital to a company or project.