Which One of the Following Stocks Is Correctly Priced If

question 91

Multiple Choice

Which one of the following stocks is correctly priced if the risk-free rate of return is 3.2 percent and the market rate of return is 11.76 percent? $$\begin{array} { c c c } \text { Stock } & \text { Beta } & \text { Expected Return } \\\text { A } & 0.87 & 11.03 \% \\\text { B } & 1.09 & 12.50 \% \\\text { C } & 1.18 & 13.21 \% \\\text { D } & 1.34 & 15.02 \% \\\text { E } & 1.62 & 17.07 \%\end{array}$$

• A)A
• B)B
• C)C
• D)D
• E)E

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Definitions:

Turnover Process

The sequence of steps or activities involved when an employee leaves an organization and is replaced.

Models

Models are simplified representations or frameworks used to explain complex systems or processes, aiding in understanding and prediction.

Retention Strategies

Are approaches undertaken by organizations to keep employees and reduce turnover rates.

Job Dissatisfaction

A negative emotion towards one’s job due to various factors like working conditions, relationships, or a mismatch between job expectations and reality.