You Are Holding a Stock Which Has a Beta of 2.0

question 68

Multiple Choice

You are holding a stock which has a beta of 2.0 and is currently in equilibrium. The required return on the stock is 15 percent, and the return on an average stock is 10 percent. What would be the percentage change in the return on the stock, if the return on an average stock increased by 30 percent while the risk-free rate remained unchanged?

• A) +20%
• B) +30%
• C) +40%
• D) +50%
• E) +60%

Identify the conditions under which cartels and collusion models can successfully operate.

Differentiate between various models of oligopoly and their outcomes on market competition and pricing.

Recognize the implications of dominant firms' strategies on market competition and output determination.

Apprehend the legal stance on predatory pricing, price-fixing, and cartel operations within the context of U.S. antitrust laws.

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Definitions:

Sibling Rivalry

Competition, jealousy, and conflict between siblings, which can range from mild to severe and impact family dynamics.

Superiority Complex

A psychological defense mechanism in which a person's feelings of superiority mask their feelings of inferiority.

Cognitive Simplicity

A cognitive style or way of construing the environment characterized by a relative inability to perceive differences among people.

Conditional Positive Regard

Approval, love, or acceptance granted only when a person expresses desirable behaviors and attitudes.