The Risk-Free Rate and the Expected Market Rate of Return

question 80

Multiple Choice

The risk-free rate and the expected market rate of return are 6% and 16%, respectively. According to the capital asset pricing model, the expected rate of return on security X with a beta of 1.2 is equal to ________.

• A) 12%
• B) 17%
• C) 18%
• D) 23%

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Definitions:

Drop In Crimes

A decrease in the number and severity of reported criminal acts within a specific area or time period.

Primary Motivation

The fundamental drive or main reason behind an individual's actions or behaviors.

Need For Money

The necessity for financial resources to fulfill basic necessities, desires, and goals in life.

Stealing A Car

The illegal act of taking another person's vehicle without their consent, also known as grand theft auto.