Netflicks, Inc

question 5

Multiple Choice

Netflicks, Inc. has a beta of 3.61. If the market return is expected to be 13.2 percent and the risk-free rate is 7 percent, what is Netflicks' risk premium?

• A) 20.91%
• B) 22.38%
• C) 25.72%
• D) 29.38%

---

Definitions:

Demand Curve

The demand curve is a graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Economic Rent

Extra earnings above the minimum amount necessary for a resource to remain in its current use, often arising from scarcity or market control.

Natural Resources

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Market Prices

The current price at which a good or service can be bought or sold in an open market, determined by supply and demand dynamics.