Stock a Has a Required Return of 18% and a Beta

question 60

Multiple Choice

Stock A has a required return of 18% and a beta of 1.4. The expected market return is 14%. What is the risk-free rate?

• A)0.6%
• B)1.2%
• C)3.0%
• D)4.0%
• E)6.0%

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Definitions:

Operant Conditioning

A learning method where the consequences of a behavior influence the likelihood of that behavior occurring again.

Organisms Learn

The process by which living organisms acquire new behaviors or modify existing ones through experience and interaction with the environment.

Fixed-Ratio

A schedule of reinforcement where a response is reinforced only after a specified number of responses, often used in behavior modification.

Schedule of Reinforcement

The strategy or plan for timing and frequency of reinforcement to establish or maintain a behavior in operant conditioning.