The Risk-Free Rate Is 3

question 80

Multiple Choice

The risk-free rate is 3.0 percent and the expected return on the market is 9 percent.Stock A has a beta of 1.20.For a given year,Stock A returned 12.5 percent while the market returned 9.75 percent.The systematic portion of Stock A's unexpected return was _____ percent and the unsystematic portion was _____ percent.

• A)0.80; 1.30
• B)0.90; 1.40
• C)1.11; 2.30
• D)1.40; 0.90
• E)4.62; 1.41

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Definitions:

Lower-Income Segment

A portion of the population or market characterized by lower earnings, often targeted by businesses offering more affordable products or services.

Developing Economies

Countries that are in the process of industrialization, with relatively low per capita income and seeking to improve their economic base.

Market-Creating Innovations

Innovations that establish new markets by solving unserved or underserved problems and fulfilling unmet needs.

Performance Innovations

Innovations aimed at enhancing the efficiency, productivity, or effectiveness of operations in organizations or systems.