A Risky Asset Has a Beta of 1

question 26

Multiple Choice

A risky asset has a beta of 1.40 and an expected return of 17.6 percent.What is the risk-free rate if the risk-to-reward ratio is 8.4 percent?

• A) 2.74 percent
• B) 4.03 percent
• C) 4.33 percent
• D) 5.32 percent
• E) 5.84 percent

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Definitions:

Ml

Milliliter, a unit of volume in the metric system, commonly used to measure liquids or fluid substances in medicine.

Drug Concentration

The amount of a drug within a given volume or weight of blood, serum, or other bodily fluids, critical for therapeutic effectiveness.

Estimated Dose

A calculation of the amount of a substance, such as medication, believed to be required for a specific treatment.

Mg

An abbreviation for milligrams, a unit of mass equal to one thousandth of a gram.