A Stock Has a Beta of 1

question 64

Multiple Choice

A stock has a beta of 1.47 and an expected return of 16.6 percent.The risk-free rate is 4.8 percent.What is the slope of the security market line?

• A)6.49 percent
• B)7.28 percent
• C)8.03 percent
• D)9.03 percent
• E)9.99 percent

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Definitions:

Fraud

The deliberate deception to secure unfair or unlawful gain, or to deprive a victim of a legal right.

Misrepresentation

Misrepresentation in law refers to a false statement of fact made by one party to another, which has the effect of inducing that party into entering a contract.

Investment Scheme

A structured plan or strategy involving the allocation of funds or resources with the expectation of achieving financial returns.

Reputed Financiers

Individuals or institutions with a well-regarded reputation in the financial sector for their expertise and integrity in handling investments.