The Beta of RicciCo

question 70

Multiple Choice

The beta of RicciCo.'s share is 3.2, whereas the risk-free rate of return is 9 per cent. If the expected return on the market is 18 per cent, then what is the expected return on RicciCo.?

• A) 28.80%
• B) 37.80%
• C) 48.60%
• D) 57.60%

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Definitions:

Order Cost

The total expense incurred in placing and processing an order, including administrative expenses, shipping charges, and any other relevant costs.

Carrying Cost

The total cost of holding inventory, including storage, insurance, and opportunity costs, among others.

Fixed-Period System

An inventory management system where stock levels are checked at fixed intervals and replenished as necessary, regardless of the inventory level.

Service Level

A measure of the quality of service provided, often defined by the percentage of customer demands met within a certain time period.