Consider the CAPM

question 47

Multiple Choice

Consider the CAPM. The risk-free rate is 5% and the expected return on the market is 15%. What is the beta on a share with an expected return of 17%?

• A).5
• B).7
• C)1
• D)1.2

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Definitions:

Certified Checks

Checks guaranteed by a bank, verifying that the signer has enough funds in their account to cover the amount specified on the check.

Dishonored

In financial terms, a dishonored instrument (like a check) refers to one that cannot be processed because the payor's account lacks sufficient funds or is closed.

Liability

The state of being legally responsible for something, particularly for debts or legal obligations.

Intermediary Bank

A financial institution that acts as a middleman between a payer's and a payee's banks, especially in international wire transfers.