What Is the Beta of a Security with an Expected

question 106

Multiple Choice

What is the beta of a security with an expected return of 12% if Treasury bills yield 6% and the market risk premium is 8%?

• A) 0.50
• B) 0.75
• C) 0.90
• D) 1.50

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Definitions:

Subrogation

The process by which one party takes over the rights of another party, typically in the context of insurance claims.

Double Recovery

The act of obtaining compensation from two different sources for the same injury, loss, or damages, which is legally prohibited.

Third Parties

Individuals or entities that are not directly involved in a two-party agreement or transaction but may be affected by it or have interests in its outcome.

Co-insurance Clause

A provision in an insurance policy requiring the policyholder to bear a portion of the losses to the extent of a specified percentage.