The Risk-Free Rate of Return Is 4

question 46

Multiple Choice

The risk-free rate of return is 4.2 percent, the expected market return is 9 percent, and the beta for Lea, Inc.is 1.12.What is Lea's required rate of return?

• A) 9.58%
• B) 10.08%
• C) 13.70%
• D) 14.28%

---

Definitions:

Labour Unrest

Discontent or conflict within the workforce usually due to poor working conditions, low pay, or lack of rights.

Severance Pay

Payment to a worker upon permanent separation from a company.

Permanent Separation

The termination of an employee's position within a company without the expectation of return.

Supplemental Unemployment Benefit

A program that provides additional financial support to laid-off employees over and above government unemployment benefits, often funded by employers.