Suppose the MiniCD Corporation's Common Stock Has a Return of 12

question 23

Multiple Choice

Suppose the MiniCD Corporation's common stock has a return of 12%. Assume the risk-free rate is 4%, the expected market return is 9%, and no unsystematic influence affected Mini's return. The beta for MiniCD is:

• A) 0.89.
• B) 1.60.
• C) 2.40.
• D) 3.00.

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Definitions:

Triple Bottom Line Approach

A business strategy focusing on social, environmental, and financial success simultaneously.

Maximizing Profits

The process of increasing the difference between the revenue generated and the costs incurred by a business.

Economic Conditions

The state of the economy at a given time, influenced by factors like inflation rates, unemployment levels, GDP growth, and market demand.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.