A Stock's Average Return Is 10 Percent

question 32

Multiple Choice

A stock's average return is 10 percent. The average risk-free rate is 7 percent. The standard deviation of the stock's return is 4 percent, and the stock's beta is 1.5. What is the Treynor indexfor the stock?

• A) 0.03
• B) 0.75
• C) 1.33
• D) 0.02
• E) 50

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Definitions:

Industrial Workers

Employees involved in the manufacturing sector, often in factories, who contribute to the production of goods.

Collective Bargaining

The process of negotiations between an employer and a group of employees to regulate working conditions.

CIO's Philosophy

The core beliefs and principles underlying the Congress of Industrial Organizations, focusing on industrial unionism and the organization of all workers within an industry, regardless of craft, to promote workers' rights and collective bargaining.

Economic Insecurity

A condition where individuals or households are unable to predict their future financial stability, often due to unstable employment or income.