The Expected Return of the Market Is 12

question 93

Multiple Choice

The expected return of the market is 12.90 percent. A stock has an expected return of 14.90 percent and a beta of 1.25. What is the risk-free rate?

• A) 6.3%
• B) 5.4%
• C) 4.9%
• D) 5.8%
• E) 6.1%

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Definitions:

Eyewitnesses

Individuals who have directly seen an event occur, whose accounts can provide crucial information for investigations.

Source Misattribution

A memory error where a person remembers the information but forgets the source of that information, leading to potential misinformation.

Partial Loss

A situation where there is a reduction or diminishment in quantity, quality, or extent of something, but not a complete loss.

Memory

The faculty by which the mind stores and remembers information.