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A Risky Asset Has a Beta of 1

question 35

Multiple Choice

A risky asset has a beta of 1.64 and the expected return of 18.8%. What is the risk-free rate if the reward-to-risk ratio is 7%?


Definitions:

Individual Differences

The variations among people in their qualities, abilities, experiences, and preferences.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, involving the biological, emotional, social, and cognitive forces that activate movement towards a goal.

External Locus

A belief or perception that one's outcomes and experiences are controlled by external forces or outside factors.

Internal Locus

The belief that one's actions and behaviors are guided by personal decisions and efforts, rather than by external factors.

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