MNC Corporation Has a Beta of 2

question 40

Multiple Choice

MNC Corporation has a beta of 2.0.The risk-free rate of interest is 5%,and the return on the stock market overall is expected to be 13%.What is the required rate of return on MNC stock

• A) 21%.
• B) 41%.
• C) 16%.
• D) 13%.
• E) none of the above

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Definitions:

Legal Tender

The government-mandated currency that must be accepted as payment for debts.

Ruble

The official currency of Russia, symbolizing the country's economic activity.

Open-Market Operations

The buying and selling of government securities by a central bank to control the money supply and interest rates.

Federal Reserve

The primary banking authority in the United States, tasked with overseeing monetary policy, managing bank regulation, and maintaining financial system stability.