What Is the Expected Risk-Free Rate of Return If Asset

question 156

Multiple Choice

What is the expected risk-free rate of return if asset X, with a beta of 1.5, has an expected return of 20 percent, and the expected market return is 15 percent?

• A) 5.0%
• B) 7.5%
• C) 15.0%
• D) 22.5%

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Definitions:

Molarity

A measure of the concentration of a solute in a solution, defined as the number of moles of solute per liter of solution.

Sugar

A sweet-tasting, soluble carbohydrate, often used as a sweetener in food, commonly sourced from sugarcane and sugar beets.

Molarity

A concentration unit of a solution expressed as moles of solute divided by liters of solution.

NaCl

Sodium chloride, commonly known as table salt, which is essential for human health.