White Company Stock Has a Beta of 2 and a Required

question 91

Multiple Choice

White Company stock has a beta of 2 and a required return of 23%,while Black Company stock has a beta of 1.0 and a required return of 14%.The standard deviation of returns for White Company is 10% more than the standard deviation for Black Company.The expected return on the market portfolio according to the CAPM is

• A) 9%.
• B) 10%.
• C) 12%.
• D) 14%.

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Definitions:

Nonsense Syllables

A methodological tool used in cognitive research consisting of strings of letters that do not follow grammar rules or produce meaningful words, used to study memory processes.

Hermann Ebbinghaus

A German psychologist who pioneered the experimental study of memory and is known for discovering the forgetting curve and the spacing effect.

Nonsense Syllables

Arbitrary sequences of letters that do not have meaning, often used in memory and learning experiments.

Memory Research

The study of how the brain acquires, stores, and retrieves information, focusing on understanding memory processes.