Consider the CAPM

question 74

Multiple Choice

Consider the CAPM. The expected return on the market is 18%. The expected return on a stock with a beta of 1.2 is 20%. What is the risk-free rate?

• A) 2%
• B) 6%
• C) 8%
• D) 12%

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Definitions:

Oil and Gas

Natural resources found beneath the Earth's surface, used as crucial energy sources and raw materials in various industries.

Rising Salt Dome

A geological formation where a column of salt moves upward through overlying sediments, often forming a dome-like structure.

Fault Zone

A fault zone is a region of the Earth's crust characterized by one or more faults, which are fractures along which there has been displacement of the sides relative to one another.

Unconformity

A surface within the rock record that represents a gap in the geological history due to erosion or non-deposition of sediments.