CAPM Required Return a Company Has a Beta of 0

question 73

Multiple Choice

CAPM Required Return A company has a beta of 0.50. If the market return is expected to be 12 percent and the risk-free rate is 5 percent, what is the company's required return?

• A) 6.0%
• B) 8.5%
• C) 11.0%
• D) 13.5%

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Definitions:

Administration Half-life

The time required for the concentration of a drug in the body to be reduced by half after its administration, a key factor in determining the dosage and frequency of medication.

Frontal Cortex

The front part of the cerebral cortex involved in decision making, problem solving, control of purposeful behaviors, consciousness, and emotions.

Cerebellum

A part of the brain located at the back of the skull, primarily involved in coordinating movement and balance.

Hippocampus

A major component of the brain that plays critical roles in memory formation, navigation, and the emotional response.