Wendy Purchased 800 Shares of Robotics Stock at $3 Per

question 101

Multiple Choice

Wendy purchased 800 shares of Robotics stock at $3 per share on 1/1/09.Wendy sold the shares on 12/31/09 for $3.45.Robotics stock has a beta of 1.3,the risk-free rate of return is 3%,and the market risk premium is 8%.The required return on Robotics stock is

• A) 13.4%.
• B) 16.5%.
• C) 17.6%.
• D) 21.1%.

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Definitions:

Nonrenewable Resources

Natural resources that cannot be replenished within a human lifetime, such as fossil fuels or minerals.

Opportunity Cost

The value of the next best alternative foregone as the result of making a decision, representing the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Extracting

The process of obtaining raw materials from the natural environment for use in the production of goods or services.

Selling

The act of offering goods or services in exchange for money, involving strategies and processes to persuade customers to make a purchase.