A Stock Has an Expected Return of 9

question 89

Multiple Choice

A stock has an expected return of 9.5 percent, the risk-free rate is 2 percent and the return on the market is 8 percent. What is this stock's beta?

• A) 1.50
• B) 1.25
• C) 1.19
• D) 0.94

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Definitions:

Serous Membrane

A thin layer of tissue that lines certain internal cavities of the body, secreting a serous fluid to lubricate and reduce friction between internal organs.

Visceral

Relating to the internal organs.

Parietal Pleura

The outer membrane that lines the inner surface of the chest wall and diaphragm in the thoracic cavity, but does not cover the lungs directly.

Peritonitis

Inflammation of the peritoneum, the thin tissue that lines the inner wall of the abdomen and covers most of the abdominal organs.