Stock a Has a Beta of 1

question 45

Multiple Choice

Stock A has a beta of 1.47 while stock B has a beta of 1.08 and an expected return of 13.2 percent. What is the expected return on stock A if the risk-free rate is 4.5 percent and both stocks have equal reward-to-risk premiums?

• A) 12.12 percent
• B) 15.07 percent
• C) 16.34 percent
• D) 16.89 percent
• E) 17.78 percent

---

Definitions:

Discriminative Stimulus

A stimulus in the presence of which a particular response will be reinforced or punished, indicating when a behavior is likely to have a consequence.

Lashley-Wade

Refers to research conducted by Lashley and Wade on learning and memory, often associated with the principles of brain function and the localization of memory.

Training Stimulus

A specific environmental event or condition presented with the purpose of eliciting a particular response during the learning process.

Test Stimuli

Specific items or presentations used in experimental settings to elicit responses from subjects under study, aimed at investigating behaviors, perceptions, or cognitive processes.