Security I Has a Beta of 1

question 28

Multiple Choice

Security I has a beta of 1.3,the risk-free rate is 4%,and the expected return on the market is 11%.What is the expected return for Security I?

• A) 15.0%
• B) 18.3%
• C) 14.6%
• D) 13.1%

---

Definitions:

Marginal Benefit

The boost in enjoyment or value obtained when one more unit of a product or service is consumed or produced.

Economic Theory

A conceptual framework that explains economic processes, behaviors, and the interaction of economic agents, based on assumptions and predictions.

Illegal Immigrants

Individuals who enter or reside in a country without the proper authorization or documentation from the government.

Legal Residents

Individuals who have been granted the right to live permanently in a country other than their own, through a legal process.