Stock J Has a Beta of 1

question 77

Multiple Choice

Stock J has a beta of 1.25 and an expected return of 13 percent. Stock S has a beta of 0.90 and an expected return of 11 percent. What does the risk-free rate have to be for the stocks to be priced correctly relative to each other?

• A) 6.15%
• B) 3.84%
• C) 4.38%
• D) 4.95%
• E) 5.86%

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Definitions:

Gastrointestinal Function

Refers to the activities of the digestive system, including ingestion, digestion, absorption, and excretion of food and nutrients.

Clay Colour Stool

Refers to pale or light-colored stool, which may indicate a problem with the liver, gallbladder, or pancreas.

Internal Anal Sphincter

The innermost muscle of the anus, responsible for maintaining continence and controlling the expulsion of feces.

Urge To Defecate

The natural sensation of needing to pass stools from the body.