Loblaw's Stock Has a Beta of 0

question 82

Multiple Choice

Loblaw's stock has a beta of 0.9,while Bombardier stock has a beta of 1.35.If the risk-free rate is 2%,and the market risk premium is 8%,what is the expected return on a portfolio with equal holdings of Loblaw's and Bombardier?

• A)9.25%
• B)8.75%
• C)10%
• D)11%
• E)13.25%

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to record unrecognized income or expenses, ensuring the financial statements are accurate.

Purchased

Refers to items or assets acquired by a company through the exchange of money or its equivalents.

Unearned Fees

Income received by a company for goods or services yet to be provided or delivered, recorded as a liability on the balance sheet until earned.

Adjusting Entry

A financial record created during the closing of an accounting cycle to appropriately distribute revenues and expenses to their respective periods.