The Market Rate of Return Is 12

question 19

Multiple Choice

The market rate of return is 12.5% and the risk-free rate is 3.1%.What will be the change in a stock's expected rate of return if its beta increases from 1.2 to 1.4?

• A) 1.88%
• B) 2.5%
• C) 18.8%
• D) 25.0%

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Definitions:

Ohmic Value

The resistance value of a component or material, typically measured in Ohms (Ω), indicating how much it resists the flow of electric current.

Fixed

In an electrical or mechanical context, "fixed" typically refers to components that are stationary, unchanging, or permanently set in a particular configuration.

Voltage Dividers

Circuits that reduce voltage to a lower value, using a series connection of resistors or other components to distribute the input voltage into smaller outputs.

Field-Effect Transistors

Semiconductor devices used to control the electrical behavior in circuits, relying on an electric field to control the flow of current.