The Stock of Big Joe's Has a Beta of 1

question 50

Multiple Choice

The stock of Big Joe's has a beta of 1.14 and an expected return of 11.6%. The risk-free rate of return is 4%. What is the expected return on the market?

• A) 7.60%
• B) 8.04%
• C) 9.33%
• D) 10.67%
• E) 12.16%

---

Definitions:

Stare Decisis

The legal principle of determining points in litigation according to precedent or previous judicial decisions.

Common Law

A body of legal precedents derived from judicial decisions, as opposed to statutes or constitutions.

Erroneous Decisions

Mistaken or incorrect judgments made by individuals or bodies in positions of authority.

Civil Law System

A legal system originating in Europe, characterized by comprehensive statutes and codes as the primary sources of law.