The Historical Returns for the Past Three Years for Stock

question 68

Multiple Choice

The historical returns for the past three years for Stock B and the stock market portfolio were Stock B: 24 percent, 0 percent, 24 percent; market portfolio: 10 percent, 12 percent, 20 percent.The expected market return is 12 percent.Calculate the required rate of return (cost of equity) for Stock B using the CAPM.(The risk-free rate of return = 4%.)

• A)8.6 percent
• B)12.6 percent
• C)10.9 percent
• D)16.0 percent

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Definitions:

Couples Therapy

A form of psychotherapy aimed at resolving relationship issues and improving communication between partners.

Success Rate

The proportion or percentage of attempts that are successful in achieving a specified goal.

Communication Issues

Problems or barriers that interfere with the effective exchange of ideas or information between individuals or groups.

Family Therapist

A mental health professional specialized in treating psychological, emotional, and behavioral issues within the family structure.