A Stock with a Beta of Zero Would Be Expected

question 1

Multiple Choice

A stock with a beta of zero would be expected to:

• A) have a rate of return equal to the risk-free rate.
• B) have a rate of return equal to the market rate.
• C) have a rate of return equal to zero.
• D) have a rate of return equal to the one.

---

Definitions:

Shut Down Point

The point at which a company's revenue is exactly equal to its variable costs and it ceases operations to minimize losses.

Firm

A business organization, such as a corporation, partnership, or sole proprietorship, that sells goods or services in exchange for money.

Price

The sum of money anticipated, needed, or provided as compensation for something.

Price of Rice

The cost at which rice is sold, influenced by factors such as supply, demand, quality, and market conditions.