Calculate the Risk Premium on Stock C Given the Following

question 51

Multiple Choice

Calculate the risk premium on Stock C given the following information: risk-free rate = 5%, market return = 13%, Stock C = 1.3 Beta.

• A)8.0%
• B)10.4%
• C)15.4%
• D)16.9% Stock C Risk Premium = Beta x (market risk premium)
• = 1)3 x (13% - 5%)

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Definitions:

Alternative Dispute Resolution

A range of processes, such as mediation or arbitration, used to resolve disputes without resorting to traditional court litigation.

Conciliation

A process of resolving disputes where an impartial third party helps disputing parties to reach a mutually agreeable solution without going to court.

Arbitration

A form of alternative dispute resolution where a neutral third party, known as an arbitrator, makes a decision to resolve a dispute outside of court.

Summary Judgment

is a legal decision made by a court without a full trial, granted when there is no dispute over the material facts of the case and one party is entitled to judgement as a matter of law.