Company a Has a Beta of 0

question 74

Multiple Choice

Company A has a beta of 0.70, while Company B's beta is 1.20. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A's and B's required rates of return?

• A) 2.75%
• B) 2.89%
• C) 3.05%
• D) 3.38%

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Definitions:

Alzheimer's Patients

Individuals diagnosed with Alzheimer's disease, a progressive neurological disorder that results in memory loss, cognitive decline, and ultimately, loss of ability to perform everyday activities.

Early-Onset

Referring to the occurrence of a disease or condition at an earlier age than is typical or expected.

Genetic Defect

An abnormality in the genetic material (DNA) that may lead to diseases or malformations.

Alzheimer's Disease

A progressive neurological disorder that causes brain cells to degenerate and die, leading to severe memory loss and cognitive decline.