You Consider Buying a Share of Stock at a Price

question 15

Multiple Choice

You consider buying a share of stock at a price of $25. The stock is expected to pay a dividend of $1.50 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $28. The stock's beta is 1.1, rf is 6%, and E[rm] = 16%. What is the stock's abnormal return?

• A) 1%
• B) 2%
• C) -1%
• D) -2%

---

Definitions:

Myths

Traditional stories or legends that embody the beliefs or values of a society, often explaining natural phenomena or cultural practices.

Hiring

The process of finding, recruiting, and selecting qualified candidates for a job or position within an organization.

Sexism

The prejudice, stereotyping, or discrimination, typically against women, on the basis of sex.

Career Ladder

The career ladder is a metaphorical representation of the progression opportunities within an organization or profession, showing different levels or positions one can ascend to over time.