A Particular Stock Has an Expected Return of 18

question 3

Multiple Choice

A particular stock has an expected return of 18%.If the expected return on the market portfolio is 13%,and the risk-free rate is 5%,what's the stock's CAPM beta?

• A) 1.000
• B) 1.625
• C) 2.250
• D) 1.385

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Definitions:

Negative Income Tax

A welfare system within which individuals earning below a certain amount receive supplemental pay from the government instead of paying taxes.

Rawlsian

Pertaining to the philosophical and ethical framework proposed by John Rawls, focusing on justice as fairness and the distribution of resources.

Economic Policy

Refers to the actions that governments take in the economic field, including taxation, government spending, and the regulation of the economy.

Economic Status

The level of economic wealth, or prosperity, achieved by an individual, group, or country, often measured by income, wealth, and employment.