What Is the Expected Return on an Asset with a Beta

question 76

Multiple Choice

What is the expected return on an asset with a beta of 2.0,if the risk-free rate of interest is 5% and the expected return on the market portfolio is 10%?

• A)12.5%
• B)20%
• C)10%
• D)15%

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Definitions:

Surface Tension

A physical property of liquids that causes the surface to behave as an elastic sheet, often observed as droplets forming shapes that minimize surface area.

Cohesion

The force that holds molecules of the same substance together (e.g., water molecules to each other).

Dehydration Synthesis

A chemical reaction that binds molecules together with the loss of a water molecule.

Hydrogen Bond

A weak bond between two molecules resulting from an electrostatic attraction between a proton in one molecule and an electronegative atom in the other.