Yonan Corporation's Stock Had a Required Return of 11

question 7

Multiple Choice

Yonan Corporation's stock had a required return of 11.50% last year,when the risk-free rate was 5.50% and the market risk premium was 4.75%.Now suppose there is a shift in investor risk aversion,and the market risk premium increases by 2%.The risk-free rate and Yonan's beta remain unchanged.What is Yonan's new required return? (Hint: First calculate the beta,then find the required return.)

• A)14.03%
• B)14.38%
• C)14.74%
• D)15.10%

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.