The Beta of Elsenore, Inc

question 58

Multiple Choice

The beta of Elsenore, Inc., stock is 1.6, whereas the risk-free rate of return is 8 percent. If the expected return on the market is 15 percent, then what should investors expect as a return on Elsenore?

• A) 11.20%
• B) 19.20%
• C) 24.00%
• D) 32.00%

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Definitions:

Water Vascular System

Unique hydraulic system of echinoderms; functions in locomotion and feeding.

Echinoderms

A phylum of marine animals including starfish, sea urchins, and sea cucumbers, characterized by radial symmetry and a water vascular system.

Digestive System

A collection of organs that breaks down food into nutrients, which the body uses for energy, growth, and cell repair.

Subphylum Urochordata

A subphylum of chordates that includes marine animals known as tunicates or sea squirts, having a notochord only during their larval stage.