The Stock of Alpha Company Has an Expected Return of 15.5

question 9

Multiple Choice

The stock of Alpha Company has an expected return of 15.5% and a beta of 1.5,and Gamma Company stock has an expected return of 13.4% and a beta of 1.2.Assume the CAPM holds.What's the expected return on the market?

• A) 12%
• B) 7%
• C) 10.3%
• D) 11.2%

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Definitions:

Bystander Effect

A social psychological phenomenon where people are less likely to offer help to a victim when other people are present.

Social Trap

A situation where individuals or groups are unable to cooperate, resulting in negative outcomes for all involved due to conflicting interests.

Collective Bad

A situation or outcome that is detrimental to the well-being or interests of a group as a whole, often arising from individual actions that do not consider the collective good.

Individual Good

Benefits or positive outcomes focused on the well-being or interests of a single person.