A Company Has a Beta of 0

question 33

Multiple Choice

A company has a beta of 0.85. If the market return is expected to be 9 percent and the risk-free rate is 2.5 percent, what is the company's required return?

• A) 7.350 percent
• B) 8.025 percent
• C) 10.150 percent
• D) 21.775 percent

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Definitions:

Phallic Complex

A Freudian theory phase of childhood development characterized by attachment to the parent of the opposite sex and jealousy toward the same-sex parent.

Defence Mechanisms

Psychological strategies used unconsciously to protect oneself from anxiety and to cope with reality.

Fixation

In psychology, refers to a persistent focus of the id’s pleasure-seeking energies at an earlier stage of psychosexual development.

Gratification

Satisfaction or pleasure felt upon meeting a desire or need.