There Is a 35 Percent Probability That a Particular Stock

question 86

Multiple Choice

There is a 35 percent probability that a particular stock will earn a 16 percent return and a 65 percent probability that it will earn 10 percent.What is the risk-free rate if the risk premium on the stock is 7.5 percent?

• A) 4.20 percent
• B) 4.60 percent
• C) 5.20 percent
• D) 5.40 percent
• E) 5.80 percent

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Definitions:

Conscientious

Characterized by a person's desire to do their work or fulfill their duties well and thoroughly.

Achievement Motivation

The drive to pursue and attain goals, an intrinsic desire to accomplish tasks and achieve high standards of performance.

Sales Performance

The measurement of sales activities effectiveness, often evaluated against sales targets or goals.

Company Decision Making

The process by which businesses determine strategies, set goals, and select the best actions to achieve objectives.