A Project Has a Beta of 1

question 25

Multiple Choice

A project has a beta of 1.24,the risk-free rate is 3.8%,and the market rate of return is 9.2%.What is the project's expected rate of return?

• A) 15.21%
• B) 11.41%
• C) 10.50%
• D) 14.61%

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Definitions:

Deadweight Loss

An economic inefficiency arising when a good or service fails to meet its free market equilibrium point.

Taxes

Mandatory payments made to the government, taken from individuals' earnings and the profits of businesses, or incorporated into the price of certain products, services, and financial dealings.

Budget Deficit

The financial situation in which a governing body's expenditures exceed its revenues within a given fiscal period, leading to borrowing or debt accumulation.

GDP

GDP (Gross Domestic Product) measures the total monetary value of all finished goods and services produced within a country's borders in a specific time period, often used as an indicator of economic health.