Currently, the Expected Return on the Market Is 12

question 53

Multiple Choice

Currently, the expected return on the market is 12.5% and the required rate of return for Alpha, Inc. is 12.5%. Therefore, Alpha's beta must be

• A) less than 1.0.
• B) greater than 1.0.
• C) equal to 1.0.
• D) unknown based on the information provided.

---

Definitions:

Consumer's Surplus

The difference between the total amount consumers are willing to pay for a good or service and the total amount they actually pay.

Net Increase

The difference resulting from the amount by which something grows or goes up less any decreases.

Units of X

A measure or quantity of a specific good or product, referred to as 'X' in an economic or mathematical context.

Consumer's Surplus

The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually pay.