Stock a Has a Required Return of 19 Percent

question 30

Multiple Choice

Stock A has a required return of 19 percent. Stock B has a required return of 11 percent. Assume a risk-free rate of 4.75 percent. Which of the following is a correct statement about the two stocks?

• A)Stock A is riskier.
• B)Stock B is riskier.
• C)The stocks have the same risk.
• D)We would need to know if the markets are efficient to answer this question.

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Definitions:

Ejaculate

The release of semen from the male reproductive system, often occurring at the climax of sexual arousal.

Type A Behavior

A personality pattern characterized by aggressiveness, competitiveness, impatience, and a constant sense of urgency.

Competitiveness

The drive or inclination to strive for success or superiority over others in situations such as sports, academics, or business.

Impatience

A feeling of frustration or eagerness often resulting from having to wait or from slow progress.