PPO Stock Has a Beta of 1

question 62

Multiple Choice

PPO stock has a beta of 1.12 and an expected return of 12.64 percent.The risk-free rate of return is 3.85 percent.What is the expected return on the market?

• A)7.85%
• B)8.04%
• C)11.62%
• D)11.70%
• E)12.16%

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Definitions:

Temporary

Occurring for a limited time period; not permanent.

Permanent

Describes something that lasts indefinitely without significant change or end.

Fundamental Attribution Error

In explaining other people’s behavior, the tendency to overemphasize personality traits and underestimate situations.

Actor/Observer Bias

is the tendency to attribute one's own actions to external causes while attributing other people's behaviors to internal causes.