A Stock Has an Expected Return of 14

question 48

Multiple Choice

A stock has an expected return of 14.3 per cent,the risk-free rate is 3.2 per cent,and the market risk premium is 8.1 per cent.What must the beta of this stock be?

• A)1.21
• B)0.94
• C)1.08
• D)1.37
• E)0.88

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Definitions:

Invoices

A document sent by a seller to a buyer, detailing the products or services provided, their prices, and the total amount owed.

Trade Discount

A reduction in the listed price of goods or services, usually offered to members of the same trade or business sector.

Volume Purchase Discount

A volume purchase discount is a price reduction offered to buyers who purchase large quantities of goods or services.

Appliance Warehouse

An appliance warehouse is a large storage facility dedicated to housing household appliances like refrigerators, stoves, and washers for sale.