Stock X Has a Beta of 0

question 31

Multiple Choice

Stock X has a beta of 0.87 and an expected return of 10.4%. Stock Y has a beta of 1.1 and an expected return of 12.2%. What is the risk-free rate of return assuming that both Stock X and Stock Y are correctly priced?

• A) 2.50%
• B) 4.38%
• C) 3.59%
• D) 3.94%
• E) 3.09%

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Definitions:

Bone Fragments

Small pieces of bone that are separated from the main structure, commonly associated with fractures.

Collar

In anatomy, a term not typically used with a specific definition, hence considered NO.

Osteoclast Activity

The resorption process of bone tissue by osteoclast cells, which is critical for bone remodeling and calcium homeostasis.

Parathyroid Hormone

A hormone produced by the parathyroid glands that regulates serum calcium concentration through its effects on bone, kidney, and intestine.