The Required Return on Beta Stock Is 14

question 1

Multiple Choice

The required return on Beta stock is 14%. The risk-free rate of return is 4% and the real rate of return is 2%. How much are investors requiring as compensation for risk?

• A) 8%
• B) 10%
• C) 12%
• D) 14%

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Definitions:

Genetic Testing

The analysis of DNA, RNA, chromosomes, proteins, and certain metabolites in order to detect heritable disease-related genotypes, mutations, phenotypes, or karyotypes for clinical purposes.

Carriers

Individuals or organisms that have one copy of a recessive gene for a genetic trait or disease but do not exhibit the trait or disease themselves.

Reciprocal Translocations

A chromosome abnormality caused by exchange of segments between non-homologous chromosomes.

Nonhomologous Chromosomes

Chromosomes that are not alike and do not carry the same genes, typically one from each parent.