Suppose That Gold Digger's Beta Is -0

question 102

Multiple Choice

Suppose that Gold Digger's beta is -0.8.If the market risk premium is 8% and the risk-free interest rate is 4%,then the expected return for Gold Digger's stock is?

• A)-2.4%
• B)4.8%
• C)2.4%
• D)10.4%

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Definitions:

Financial Records

Documents that detail the income, expenses, assets, liabilities, and other financial activities of an individual or organization.

Corporate Duties

Responsibilities and obligations that members of a corporation, typically directors and officers, are required to follow in the interest of the corporation.

Business Judgment Rule

A legal principle that protects the decisions of corporate officers and directors when they act in good faith and with a reasonable basis in belief of acting in the best interest of the corporation.

Liability

A legal responsibility or obligation, typically involving financial compensation for loss or damage caused to another party.