If the Risk-Free Rate Is 7 Percent, the Expected Return

question 73

Multiple Choice

If the risk-free rate is 7 percent, the expected return on the market is 10 percent, and the expected return on Security J is 13 percent, what is the beta of Security J?

• A)1.0
• B)1.5
• C)2.0
• D)2.5
• E)3.0

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Definitions:

Sound Waves

Vibrations that travel through air or another medium and can be heard when they reach a person's or animal's ear.

Otolith

Small calcified structures found in the inner ear of vertebrates, crucial for balance and hearing by detecting motion and orientation.

Middle Ear

A part of the ear that contains three small bones known as the ossicles, responsible for transmitting sound from the outer ear to the inner ear.

Auditory Nerve

A cranial nerve that transmits sound information from the cochlea of the inner ear to the brain.