RBC Stock Has a Beta of 0

question 54

Multiple Choice

RBC stock has a beta of 0.85,while TD stock has a beta of 1.21.The risk-free rate is 1.5%,and the expected return on a portfolio with 50% weight in RBC and the remainder in TD is 9.74%.What is the market risk premium?

• A)7%
• B)9.5%
• C)8%
• D)8.2%
• E)7.2%

---

Definitions:

Spoken Language

A system of communicating using sounds, words, and grammar verbally to convey meaning and express ideas.

Wernicke's Area

is a region of the brain associated with the understanding of spoken language, located in the temporal lobe.

Broca's Area

A region in the frontal lobe of the dominant hemisphere (usually the left) of the brain that is responsible for language processing, speech production, and comprehension.

Hippocampus

A region of the brain involved in the formation of new memories and spatial navigation.