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:

Irresistible

Having an overwhelming appeal or allure that makes it impossible to resist.

Viral Infection

The invasion and multiplication of viruses in the body, which can cause disease.

Exchange of Bodily Fluids

The transfer of bodily substances such as blood, saliva, semen, and vaginal fluids, often relevant in discussions of infectious disease transmission.

AIDS

Acquired Immune Deficiency Syndrome, a chronic, potentially life-threatening condition caused by the human immunodeficiency virus (HIV) affecting the immune system.