The Expected Return for a Stock,calculated Using the CAPM,is 10

question 54

Multiple Choice

The expected return for a stock,calculated using the CAPM,is 10.5%.The market return is 9.5% and the beta of the stock is 1.50.Calculate the implied risk-free rate.

• A) 7.50%
• B) 13.91%
• C) 17.50%
• D) 21.88%
• E) 14.38%

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Definitions:

Price Range

The spread between the highest and lowest price at which a product, service, or asset is traded or offered for sale.

Ed

A common abbreviation for price elasticity of demand, which measures how much the quantity demanded of a good responds to a change in its price.

Total Revenues

The total amount of money generated by a business from the sale of goods and services before any costs or expenses are deducted.

Unit Elasticity

Unit elasticity refers to a situation where a change in the price of a good or service results in a proportionally equal change in the quantity demanded or supplied, indicating a unitary elasticity of demand or supply.