Consider an Asset That Has a Beta of 1

question 12

Multiple Choice

Consider an asset that has a beta of 1.5. The return on the risk-free asset is 6.5 percent and the expected return on the stock index is 15 percent. The estimated return on the asset is 20 percent. Calculate the alpha for the asset.

• A) 19.25 percent
• B) 0.75 percent
• C) -0.75 percent
• D) 9.75 percent
• E) 9.0 percent

Acknowledge the role of the self in cognitive processing and memory.

Comprehend the significance of possible selves in guiding behavior and motivation.

Appreciate the therapeutic approach of changing irrational beliefs to address psychological problems.

Understand the concept of social comparison and its impact on individual behavior and self-assessment.

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Definitions:

Checks

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or a named party.

Cost-Benefit

An analysis or approach that compares the costs of an action to its benefits to determine its feasibility or value.

Internal Controls

Procedures and mechanisms put in place by a company to safeguard assets, enhance the reliability of financial reports, and ensure compliance with laws and regulations.

Benefits

Forms of non-wage compensation provided to employees in addition to their normal wages or salaries, like health insurance, pensions, and holidays.