Assume a One-Factor Model Where the Factor Is Associated with the Overall

question 15

Multiple Choice

Assume a one-factor model where the factor is associated with the overall market.Suppose JSC's common stock has a factor beta of .8,the risk-free rate is 3.2 percent,and the expected market rate of return is 11.2 percent.What is the expected return for JSC stock?

• A)10.25 percent
• B)6.40 percent
• C)7.20 percent
• D)9.60 percent
• E)12.16 percent

---

Definitions:

Depressed

A state characterized by feelings of severe despondency and dejection, often accompanied by a lack of energy, disturbances in sleep and appetite, and loss of interest or pleasure in activities.

Friendships

A mutual relationship between two or more individuals, characterized by trust, affection, and support, regardless of blood relations.

Learned Helplessness

Learned Helplessness is a condition in which a person suffers from a sense of powerlessness, arising from a traumatic event or persistent failure to succeed.

Martin Seligman

A psychologist renowned for his work in the fields of positive psychology and learned helplessness.