Assume That a Security Is Fairly Priced and Has an Expected

question 63

Multiple Choice

Assume that a security is fairly priced and has an expected rate of return of 0.13. The market expected rate of return is 0.13, and the risk-free rate is 0.04. The beta of the stock is

• A) 1.25.
• B) 1.7.
• C) 1.
• D) 0.95.

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Definitions:

Collective Efficacy

A group's shared belief in its conjoint capabilities to organize and execute the courses of action required to produce given levels of attainment.

Shared Beliefs

Common values or principles held by a group of people or within an organization, forming the basis of its culture and decision-making.

Team Reflexivity

The extent to which teams deliberately discuss team processes and goals and adapt their behaviour accordingly.

Collective Efficacy

The shared belief among members of a group in their capability to execute actions necessary to achieve specific outcomes.