Given the Capital Asset Pricing Model, a Security with a Beta

question 19

Multiple Choice

Given the capital asset pricing model, a security with a beta of 1.5 should return ________, if the risk-free rate is 3% and the market return is 11%.

• A) 16.5%
• B) 14.0%
• C) 14.5%
• D) 15.0%

---

Definitions:

Pyruvates

The ionized form of pyruvic acid, a key intermediate in several metabolic pathways, including glycolysis.

Acetyl CoA

A molecule that plays a key role in metabolism, serving as a substrate for the Krebs cycle and fatty acid synthesis; it links glycolysis and pyruvate oxidation with the citric acid cycle.

Phosphorylation Reactions

Chemical reactions in which a phosphate group is added to a molecule, such as a protein, altering its function.

Exergonic

Describes a chemical reaction that releases energy, typically in the form of heat, to its surroundings.