CAPM Required Return a Company Has a Beta of 0

question 75

Multiple Choice

CAPM Required Return A company has a beta of 0.50.If the market return is expected to be 12 percent and the risk-free rate is 5 percent,what is the company's required return?

• A)6.0 percent
• B)8.5 percent
• C)11.0 percent
• D)13.5 percent

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Definitions:

Property Interest

A legal right or interest in a tangible or intangible object, which provides the holder certain privileges regarding the use, disposition, and possession of the property.

Restrict

To limit or control the size, amount, or range of something through regulations or conditions.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, designed to harmonize the law of sales and other commercial contracts.

Unconscionable

A term used to describe an agreement or term within an agreement that is so unjust or overwhelmingly one-sided in favor of one party that it is deemed unenforceable under the law.