Given Gitech's Beta of 1

question 35

Multiple Choice

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

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

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Definitions:

Desired Margin

The profit margin a company aims for over the cost of a product or service.

Increase Price

The act of raising the cost at which goods or services are sold, usually to reflect higher production costs or to gain greater profit margins.

Own-Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its own price, with higher elasticity indicating greater sensitivity.

Brand of Shoes

A specific make or line of footwear identified by a unique name or symbol, often associated with certain quality, style, or prestige.