The Risk-Free Rate Is 5% and the Expected Return on the Market

question 38

Multiple Choice

The risk-free rate is 5% and the expected return on the market portfolio is 13%.A stock has a beta of 1.0,what is its expected return?

• A) 8%
• B) 13%
• C) 5%
• D) none of the above

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Definitions:

Market Wage Rates

The average amount of money paid for a specific job in the marketplace, influenced by factors such as industry demand, skill level, and geographic location.

Labor Supply

Refers to the total number of workers available and willing to work in a particular job market.

Occupational Information Network

The Occupational Information Network (O*NET) is a comprehensive database providing detailed descriptions of job functions, skills, education requirements, and work environments for various occupations.

Computerized System

An assembly of hardware and software organized to collect, process, store, and disseminate data for the purpose of facilitating planning, control, coordination, analysis, and decision making.