A Stock Has a Beta of 1

question 73

Multiple Choice

A stock has a beta of 1.37 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) 8.61 percent
• D) 9.23 percent
• E) 9.99 percent

---

Definitions:

Inflationary Recessions

Periods characterized by rising prices (inflation) occurring simultaneously with a decline in economic activity and employment (recession).

Monetary

Pertaining to currency or money, including policies, management, and the overall financial system that regulates money supply and interest rates in an economy.

Fiscal Policies

Government policies related to taxation and spending with the aim of influencing economic conditions.

Fiscal Policy Stimulus

Government measures, typically involving increased public spending and tax cuts, aimed at boosting economic activity.