The Risk-Free Rate Is 5

question 90

Multiple Choice

The risk-free rate is 5.4% and the expected return on the market is 11.2%. Stock A has a beat of 1.3. For a given year, Stock A returned 14.8% while the market returned 12.7%. The systematic portion of the return was ________ and the unsystematic portion was _________.

• A) 1.95%; -0.09%
• B) 2.85%; 1.07%
• C) 3.27%; 1.03%
• D) 2.47%; -1.67%
• E) 2.25%; 1.23%

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Definitions:

Accounts Payable

Money owed by a business to its suppliers shown as a liability on a company's balance sheet.

Equipment

Durable physical assets used in operations, such as machinery and tools, which have a useful life longer than one accounting period.

Office Supplies

Consumable items used in offices for daily operations, such as paper, pens, and staplers, distinct from longer-term assets.

Accounts Payable

Liabilities of a company representing money owed to creditors for goods and services purchased on credit.