What Is the Expected Return of a Stock with a Risk

question 17

Multiple Choice

What is the expected return of a stock with a risk premium of 7.6 percent if the risk-free rate is 4.8 percent?

• A) 12.4%
• B) 13.1%
• C) 11.3%
• D) 2.8%
• E) 11.7%

---

Definitions:

Validity Test

An assessment used to determine whether a tool, test, or method accurately measures what it is intended to measure.

Temporary Employee

A worker hired for a specific, limited period of time, often to fulfill seasonal demands or complete particular projects.

Work Demands

The requirements, tasks, and pressures involved in a job or professional role, which can impact an individual's health and well-being.

An Intern

A person, often a student, undergoing supervised practical training in a professional field.