Zelo Stock Has a Beta of 1

question 109

Multiple Choice

Zelo stock has a beta of 1.23.The risk-free rate of return is 2.86 percent and the market rate of return is 11.47 percent.What is the amount of the risk premium on Zelo stock?

• A)9.47 percent
• B)12.60 percent
• C)11.54 percent
• D)10.59 percent
• E)12.30 percent

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Definitions:

Scrap

Waste material or discarded items left over from manufacturing processes or considered of inadequate quality for use.

Solver

A computational tool used in optimization to find the best solution to a mathematical problem under given constraints.

Optimal Solution

The most efficient and effective answer to a problem, often achieved through mathematical processes and analysis.

Scrap

Materials that are discarded and considered waste, often remnants from manufacturing processes or defective items.