The SML Is 6% + 8% (Beta)

question 45

Multiple Choice

The SML is 6% + 8% (Beta) . For Stock A, its covariance with the market is 200 and its standard deviation is 10. The expected rate of return for Stock A is

• A) 10%.
• B) 18%.
• C) 8%.
• D) 22%.

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Definitions:

Traditional

Refers to ideas, customs, and practices that are handed down through generations in cultures or societies.

Field

An area of open land, often used for cultivation or pasture.

Slave Rebellion

An uprising by enslaved people against their enslavers and the oppressive systems that held them in bondage, often aiming to gain freedom or improvements in conditions.

Charleston

A historic city in South Carolina, known for its well-preserved architecture, rich history, and pivotal role in both the American Civil War and the early slave trade.