Required Return If the Risk-Free Rate Is 8 Percent and the Market

question 80

Multiple Choice

Required Return If the risk-free rate is 8 percent and the market risk premium is 2 percent,what is the required return for the market?

• A)2 percent
• B)6 percent
• C)8 percent
• D)10 percent

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Definitions:

Risk Management

The practice of identifying, assessing, and controlling threats to an organization's capital and earnings.

Offshore Supplier

A supplier located in a different country, often chosen for cost advantages or specific expertise.

Supplier's Currency

Refers to the currency in which a supplier prefers to conduct transactions, possibly influencing international trade and payment methods.

Countertrade

A method of trade in which goods or services are exchanged directly for other goods or services without the use of money.