Which One of the Following Stocks Is Correctly Priced If

question 38

Multiple Choice

Which one of the following stocks is correctly priced if the risk-free rate of return is 3.2 percent and the market rate of return is 11.76 percent?

• A)A
• B)B
• C)C
• D)D

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Definitions:

Rectangular Coordinate

A system of specifying points on a plane using two distances, typically known as the x and y coordinates, which define the position relative to two perpendicular axes.

Square

To multiply a number by itself, or a geometric figure with four equal sides and four right angles.

Y-axis

The vertical line in a coordinate plane that measures the second coordinate of a point (its ordinate).

X-axis

The x-axis is the horizontal axis in a coordinate plane, used to represent one dimension of data or to plot the values of a function.