A Stock Has a Beta of 1

question 18

Multiple Choice

A stock has a beta of 1.4 and an expected return of 13.53%.What is the risk-free rate if the market rate of return is 10.6%?

• A) 2.825%
• B) 3.250%
• C) 3.275%
• D) 3.415%

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Definitions:

Guided Imagery

A relaxation technique that involves visualizing a peaceful scene or series of experiences in the mind to manage stress or pain.

Social Regulation

Regulations aimed at improving social welfare by addressing issues like environmental protection, worker safety, and fair trade practices.

Anticompetitive

Actions or policies that prevent or reduce competition in a market, often deemed illegal or unethical.

Innovation

A process of implementing new ideas, creating dynamic products, or improving existing services.