Assuming a Market Rate Risk of 8 Percent and a Return

question 15

Multiple Choice

Assuming a market rate risk of 8 percent and a return on Treasury bills of 4 percent,what would the total estimate of the required rate of return be for a stock with a beta of 1.7?

• A)13.6 percent
• B)13.7 percent
• C)14.8 percent
• D)17.6 percent

---

Definitions:

Operating Segments

Aspects of a business for which individual financial details are accessible and are consistently reviewed by the principal operating decision maker for the purposes of resource distribution and performance assessment.

Revenue Test

An assessment used in various contexts to determine if a certain level of revenue has been achieved or to evaluate the revenue-generating capability of a business.

Operating Segments

Components of a business for which separate financial information is available and evaluated regularly by the company's decision makers.

Reportable

Pertains to events, transactions, or details that must be disclosed in official documents or reports according to regulations or standards.