A Project Has a Beta of 0

question 102

Multiple Choice

A project has a beta of 0.97,the risk-free rate is 4.1%,and the market risk premium is 8.1%.What is the project's expected rate of return?

• A) 7.98%
• B) 11.96%
• C) 8.35%
• D) 11.83%

---

Definitions:

Stock Warrants

Financial instruments that give the holder the right, but not the obligation, to buy shares of a company at a specified price before the warrant expires.

Redeemed

Refers to the process of exchanging a financial instrument, such as a bond or coupon, for its cash value or for another specified benefit.

Specified Price

The agreed-upon price for goods or services stipulated in a contract.

Shareholder's Derivative Suit

A legal action initiated by a shareholder on behalf of the corporation against a third party, often the corporation's executives or directors, for mismanagement or fraud.