Anchor Incorporated Has a Beta of 1

question 84

Multiple Choice

Anchor Incorporated has a beta of 1.0.If the expected return on the market is 15%,what is the expected return on Anchor Incorporated's stock?

• A) 15%
• B) 14%
• C) 18%
• D) cannot be determined without the risk-free rate

---

Definitions:

Straight Enough

A colloquial term often requiring context for accurate definition; in general, it refers to something meeting a satisfactory standard of straightness.

Residual Plot

A graphical representation used in statistics to show the residuals of a model in order to diagnose the fit of the model.

Regression Assumptions

Preconditions that must be met for the results of a regression analysis to be valid, including linearity, independence, homoscedasticity, and normality.

Textbook

A book containing comprehensive coverage of a particular subject, used primarily for the study and teaching of that subject.