A Risky Asset Has a Beta of

question 34

Multiple Choice

A risky asset has a beta of .88 and an expected return of 7.4 percent. What is the reward-to-risk ratio if the risk-free rate is 2.8 percent?

• A) 4.04 percent
• B) 5.23 percent
• C) 6.51 percent
• D) 8.41 percent
• E) 11.59 percent

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Definitions:

Broca's Area

A region in the frontal lobe of the dominant hemisphere (usually the left) of the brain that is responsible for language processing, speech production, and comprehension.

Hippocampus

A region of the brain involved in the formation of new memories and spatial navigation.

Cerebellum

A region of the brain that plays a critical role in motor control, coordination, precision, and timing of movements.

Disruption Of Language

Interruptions in the ability to comprehend or produce speech, often resulting from neurological damage or disorders affecting language areas in the brain.