A Stock Has a Beta of 1

question 48

Multiple Choice

A stock has a beta of 1.58 and an expected return of 16.2 percent.The risk-free rate is 3.8 percent.What is the market risk premium?

• A) 7.85 percent
• B) 10.01 percent
• C) 11.72 percent
• D) 12.50 percent
• E) 13.40 percent

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Definitions:

Evolutionary Approach

A theoretical framework that seeks to explain behavior through the lens of adaptation, survival, and natural selection.

Big Five

A theory in psychology describing five major dimensions of human personality: openness, conscientiousness, extraversion, agreeableness, and neuroticism.

Childhood Experiences

Events or interactions during the early years of life that significantly influence an individual's development, personality, and psychological health.

Adult Personality

Refers to the pattern of thoughts, feelings, and behaviors that are characteristic of an individual and consistent over time, fully developed and matured in adulthood.