Given a Risk-Free Rate of Return of 4 Percent, a Beta

question 10

Multiple Choice

Given a risk-free rate of return of 4 percent, a beta of 1.5, and a return on the market portfolio of 12 percent, what is the required rate of return using the CAPM?

• A)16%
• B)12%
• C)24%
• D)8%

---

Definitions:

Cognitive

Having to do with mental processes such as sensation and perception, memory, intelligence, language, thought, and problem solving.

Behavioral Components

The observable actions or reactions of individuals or groups in response to external or internal stimuli.

Emotions

Intricate mental conditions characterized by physical stimulation, observable actions, and subjective feelings.

Adaptive Thermogenesis

The process through which the body adjusts its metabolism in response to changes in the environment or dietary intake to maintain or regulate body temperature and energy balance.