A Security That Has a Beta of Zero Will Have

question 9

Multiple Choice

A security that has a beta of zero will have an expected return of:

• A)zero.
• B)the market risk premium.
• C)the risk free rate.
• D)less than the risk free rate but not negative.
• E)less than the risk free rate which can be negative.

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Definitions:

Monthly

Pertaining to or occurring once every month.

Daily

Daily refers to something done, occurring, or measured every day or each business day.

Inventory Column

A column in financial spreadsheets or ledgers that records the quantities and values of products a company has in stock.

Cash Payments Journal

A journal used in accounting to record all payments made by a company, including expenses and purchases.