Stock A's Stock Has a Beta of 1

question 26

Multiple Choice

Stock A's stock has a beta of 1.30, and its required return is 12.00%.Stock B's beta is 0.80.If the risk-free rate is 4.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)

• A) 8.76%
• B) 8.98%
• C) 9.21%
• D) 9.44%
• E) 9.68%

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Definitions:

Antecedents

Factors or events that exist or occur before a specific behavior, outcome, or development, influencing its occurrence.

Subordinate's Involvement

The participation and engagement of lower-ranking employees in decision-making processes and projects within an organization.

Corrective Feedback

Information provided to an individual about their performance with the intention of improving it.

Explanation

The process of making something clear or understandable by describing or presenting facts and details.