A Company Has a Beta of 3

question 40

Multiple Choice

A company has a beta of 3.75. If the market return is expected to be 20 percent and the risk-free rate is 9.5 percent, what is the company's required return?

• A) 33.250 percent
• B) 39.375 percent
• C) 48.875 percent
• D) 55.625 percent

---

Definitions:

Customer's Bank Account

The bank account of a customer, used for transactions between the customer and a company.

Restrictive Endorsement

An endorsement on a check or other financial instrument limiting the way the funds can be used or restricting further endorsement.

Endorsed

Endorsed refers to the approval or support, often given formally or officially to signify agreement with or sanction of something.

Full Endorsement

A signature on the back of a negotiable instrument, such as a check, that specifies the person to whom the instrument is to be paid, transferring ownership.