What Will Happen to the Expected Return on a Stock

question 79

Multiple Choice

What will happen to the expected return on a stock with a beta of 1.5 and a market risk premium of 9% if the Treasury bill yield increases from 3 to 5%?

• A) The expected return will remain unchanged.
• B) The expected return will increase by 1.0%.
• C) The expected return will increase by 2.0%.
• D) The expected return will increase by 3.0%.

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Definitions:

Follow-Up

The process of making additional contact with customers after a sale to ensure satisfaction and to create opportunities for future sales.

Service Recovery Process

Involves actions a company takes to rectify a failed service, aiming to restore customer satisfaction and loyalty following service failures or complaints.

Three Fs

The term "Three Fs" refers to Friends, Family, and Fools, often mentioned as the initial source of funding for start-ups and small businesses.

Orphan

A child who has lost both parents through death or, in some definitions, a child who has lost one parent.