Security a Has an Expected Rate of Return of 12

question 45

Multiple Choice

Security A has an expected rate of return of 12% and a beta of 1.10. The market expected rate of return is 8% and the risk-free rate is 5%. The alpha of the share is ________.

• A)-1.7%
• B)3.7%
• C)5.5%
• D)8.7%

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Definitions:

Buyer's Belief

The perceptions and assumptions that consumers hold about a product, service, or brand, influencing their purchasing decisions.

Exchange Function

The process in which goods, services, or assets are traded between parties.

Marketing Mix

A set of actions, or tactics, that a company uses to promote its brand or product in the market. It typically includes the 'Four Ps': product, price, place, and promotion.

Customer Needs

The essential requirements and desires of buyers that motivate them to make purchasing decisions.