Stock Z Has a Beta of 0

question 25

Multiple Choice

Stock Z has a beta of 0.9 and a required rate of return of 12 percent.What is the market expected return if the risk-free rate is 5.25 percent?

• A) 7.50%
• B) 12.75%
• C) 13.33%
• D) 18.58%

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Definitions:

Reliability

The quality of being dependable or reliable; in products, it refers to the likelihood of them performing consistently over their expected lifecycle.

Mathematical Probability

The quantitative measurement of the likelihood of a certain event occurring, based on mathematical calculations.

Stipulated Time

A specified or agreed-upon period in which something is to be done or accomplished.

Total Quality Management

A comprehensive and structured approach to organizational management that seeks to improve the quality of products and services through ongoing refinements in response to continuous feedback.