Assume That the Risk-Free Rate Is 5

question 134

Multiple Choice

Assume that the risk-free rate is 5%.Which statement about a stock's beta is correct?

• A)If a stock has a negative beta, its required return under the CAPM would be less than 5%.
• B)If a stock's beta doubled, its required return under the CAPM would also double.
• C)If a stock's beta were less than 1.0, its required return under the CAPM would less than 5%.
• D)If a stock's beta were 1.0, its required return under the CAPM would be 5%.

---

Definitions:

Consumer Buying Patterns

The purchasing habits of individuals or groups, often analyzed for marketing and business strategy.

Data Mining

The process of extracting useful patterns or knowledge from large sets of data, using techniques from statistics, machine learning, and database management.

Data Warehousing

The collection and management of large volumes of data from various sources, organized for reporting and data analysis.

Prosthetic Limbs

Artificial limbs designed to replace those lost due to injury or illness, enhancing the quality of life and functionality for individuals.