The Common Stock of Flavorful Teas Has an Expected Return

question 127

Multiple Choice

The common stock of Flavorful Teas has an expected return of 14.4%.The return on the market is 10% and the risk-free rate of return is 3.5%.What is the beta of this stock?

• A).65
• B)1.09
• C)1.32
• D)1.44
• E)1.68

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Definitions:

Quasi-contract

A legal concept where a court enforces an agreement between parties even though there is no actual contract between them, to prevent one party from being unjustly enriched.

Unjust

Not based on or behaving according to what is morally right and fair.

Unilateral Contract

A contract in which only one party makes an enforceable promise to perform an action, often in response to an act by the other party.

Offeree

The party to whom an offer is made in a contract negotiation, who has the power to accept or reject that offer.