Asset Y Has a Beta of 1

question 142

Multiple Choice

Asset Y has a beta of 1.2. The risk-free rate of return is 6 percent, while the return on the market portfolio of assets is 12 percent. The asset's market risk premium is ________.

• A) 7.2 percent
• B) 6.0 percent
• C) 13.2 percent
• D) 10 percent

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Definitions:

Hierarchy

A structure where persons or teams are ordered hierarchically, with each level holding different ranks in terms of authority or prestige.

Responsibilities

Duties or obligations that an individual, group, or organization is expected or required to undertake.

High-performance Work Systems

Organizational approaches designed to enhance employee effectiveness by integrating various human resource practices, including training, development, and motivation.

Human Resource Practices

The strategies, policies, and procedures implemented by an organization to manage its employees effectively.