What Rate of Return Should an Investor Expect for a Stock

question 58

Multiple Choice

What rate of return should an investor expect for a stock that has a beta of 1.25 when the market is expected to yield 14% and Treasury bills offer 6%?

• A) 10.0%
• B) 11.2%
• C) 12.4%
• D) 16.0%

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Definitions:

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by prejudice against other groups.

Intercultural Communication

The process by which people from different cultural backgrounds attempt to share meaning and understand each other.

Assuming Similarity

Refers to the cognitive bias where one assumes others share the same beliefs and values.

Assuming Differences

The act of presuming that there are inherent distinctions between individuals or groups without evidence, often leading to stereotypes and misunderstandings.