A Stock Has a Return of 13

question 26

Multiple Choice

A stock has a return of 13.2 percent, and the risk-free rate is 4.6 percent. What is the risk premium for this stock?

• A) 4.6%
• B) 6.4%
• C) 8.6%
• D) 13.2%
• E) 17.8%

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Definitions:

Active Tectonics

The study of structural features within the Earth's crust and their movements, which are caused by the seismic and volcanic activity related to the movement of tectonic plates.

Volcanism

The geological process involving the eruption of molten rock, or magma, from below Earth's surface.

Inner Planets

The four planets closest to the Sun (Mercury, Venus, Earth, and Mars); synonym: terrestrial planets.

Outer Planets

Refers to the planets in the solar system that are located beyond the asteroid belt, including Jupiter, Saturn, Uranus, and Neptune.