Assume the Following Data: Risk-Free Rate = 4

question 59

Multiple Choice

Assume the following data: risk-free rate = 4.0%,average risk premium = 7.7%.
Calculate the required rate of return.

• A)5.6%
• B)7.6%
• C)11.7%
• D)30.8%

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Definitions:

Best Fitting Line

A line that best represents the relationship between variables in a scatter plot, minimizing the distances of the data points from the line.

Covariance

A statistical measure indicating the extent to which two variables change together.

Distribution

The arrangement or pattern of how data points or values are spread out over a range of values.

Distribution

Describes how values are spread or distributed across various levels or intervals in a dataset.