HealthEngine, Has a Beta of 2

question 66

Multiple Choice

HealthEngine, has a beta of 2.35.The return on the market portfolio is 12%, and the risk-free rate is 2.5%.According to CAPM, what is the risk premium on shares with a beta of 1.0?

• A)12.00%
• B)22.33%
• C)9.5%
• D)14.5%

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Definitions:

Public Policy

A governmental policy based on widely held societal values.

Legal Principles

Fundamental norms, rules, or doctrines that guide the practice of law and ensure fairness and justice in legal processes.

Stare Decisis

A legal doctrine that obligates courts to follow historical cases when making a ruling on a similar case.

Efficiency

The degree to which an entity effectively uses resources to achieve desired outcomes with minimal waste or effort.