If the Risk-Free Rate Is 6 Percent, the Return on an Average

question 16

Multiple Choice

If the risk-free rate is 6 percent, the return on an average stock is 10 percent, and the beta of this project is 1.50, then the expected return from the project is _____.

• A) 12%
• B) 24%
• C) 4%
• D) 19%
• E) 23%

---

Definitions:

Latent Period

A period of delay between the exposure to a stimulus and the observable response, often used in the context of reflexes and muscle contraction.

Rational Decisions

Choices made based on logical analysis, considering all available information and potential outcomes, to maximize benefit or utility.

Superego

In psychoanalytic theory, the part of the personality responsible for moral standards and self-criticism.

Biological Drives

Innate impulses in living organisms that direct behavior towards fulfilling basic needs such as hunger, thirst, and sexual reproduction.