Given Gitech's Beta of 1

question 186

Multiple Choice

Given Gitech's beta of 1.55 and a risk-free rate of 8 percent, what is the expected rate of return assuming a 14 percent market return?

• A) 12.4 percent
• B) 14.3 percent
• C) 17.3 percent
• D) 20.4 percent
• E) 29.7 percent

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Definitions:

Trail of Tears

The forced relocations of Native American nations from their ancestral homelands in the Southeastern United States to areas west of the Mississippi River during the 1830s.

Cotton Cultivation

The agricultural process of growing cotton plants for their fibers, which are harvested and processed to make textile products.

Second Bank

A federal institution that served as the United States' central bank from 1816 to 1836, succeeding the First Bank of the United States.

Nicholas Biddle

A prominent early 19th-century American financier and President of the Second Bank of the United States, known for his battles with President Andrew Jackson over the bank's renewal.