Nystrand Corporation's Stock Has an Expected Return of 12

question 56

Multiple Choice

Nystrand Corporation's stock has an expected return of 12.25%, a beta of 1.25, and is in equilibrium.If the risk-free rate is 5.00%, what is the market risk premium?

• A) 5.80%
• B) 5.95%
• C) 6.09%
• D) 6.25%
• E) 6.40%

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Definitions:

Arsenopyrite

A metallic gray, natural mineral compound of arsenic, iron, and sulfur, often associated with the occurrence of gold.

Formula

A concise way of expressing information symbolically, as in a mathematical or chemical formula representing the composition of substances.

FeAsS

Also known as Arsenopyrite, it is a mineral consisting of iron, arsenic, and sulfur.

Realgar

A red-orange arsenic sulfide mineral, historically used as a pigment and in fireworks.