Assume That the Risk-Free Rate Is 6% and the Market

question 81

Multiple Choice

Assume that the risk-free rate is 6% and the market risk premium is 5%. Given this information, which of the following statements is CORRECTσ

• A) if a stock has a negative beta, its required return must also be negative.
• B) an index fund with beta = 1.0 should have a required return less than 11%.
• C) if a stock's beta doubles, its required return must also double.
• D) an index fund with beta = 1.0 should have a required return greater than 11%.
• E) an index fund with beta = 1.0 should have a required return of 11%.

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Definitions:

Medication Error

Any preventable event that may cause or lead to inappropriate medication use or harm to a patient.

Abbreviation

A shortened form of a word or phrase used to save space or avoid repetition.

High Alert

A state of heightened vigilance and readiness for action, often used in contexts where there's increased risk.

IV Medication

Drugs administered directly into the bloodstream through a vein, providing rapid therapeutic effects.