The Market Expected Return Is 14 Percent with a Standard

question 71

Multiple Choice

The market expected return is 14 percent with a standard deviation of 12 percent.The risk-free rate is 5.5 percent.Security A has just paid a dividend of $1.50,which is expected to grow at a rate of 10 percent per year indefinitely.What is the current price of Security A if it has a beta of 1.4?

• A) $9.93
• B) $10.93
• C) $20.27
• D) $22.30

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Definitions:

Humanistic Therapy

Type of therapy in which the goal is to help the client discover his or her place in the world and to accomplish self-actualization through self-exploration; based on the assumption that the natural tendency for humans is toward growth (also called person-centered therapy).

Self-Exploration

The process of examining one's own thoughts, feelings, and behaviors in order to gain insight.

Collective Unconscious

A theory proposing that societies share a set of memories and ideas inherited from their ancestors, independent of personal experience.

Carl Jung

A Swiss psychiatrist and psychoanalyst who founded analytical psychology, known for his theories of the collective unconscious and archetypes.