Assume the Following Information About the Market and JumpMasters' Stock

question 47

Multiple Choice

Assume the following information about the market and JumpMasters' stock. JumpMasters' beta = 1.50,the risk-free rate is 3.50%,the market risk premium is 10.0%.Using the SML,what is the expected return for JumpMasters' stock?

• A)7.50%
• B)13.50%
• C)18.50%
• D)27.00%

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Definitions:

More Elastic

Describes a situation where the demand or supply for a good or service is highly responsive to changes in price.

Less Elastic

Describes a situation where the demand or supply for a product or service is relatively unresponsive to changes in price.

Perfectly Inelastic

A situation where the demand or supply for a good does not change in response to changes in price.

Demand Curve

A graph that shows the relationship between the quantity of a good demanded and its price.