The Expected Rate of Return on Research Industries Is Twice

question 199

Multiple Choice

The expected rate of return on Research Industries is twice the 12 percent expected rate of return from the market. What is Research's beta if the risk-free rate is 6 percent?

• A) 2
• B) 3
• C) 4
• D) 5
• E) 6

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Definitions:

Sample Proportion

The ratio of members within a sample that possess a particular trait or characteristic, relative to the total sample size.

Null Hypothesis

The hypothesis that predicts no interaction or association between variables, serving as the benchmark for statistical testing.

Null Hypothesis

The hypothesis that there is no effect or no difference, and any observed deviation from this is due to sampling or experimental error.

Level of Significance

A threshold used in hypothesis testing to determine if a result is statistically significant, often represented by the alpha (α) level.