Company A has a beta of 0.70, while Company B's beta is 1.20. The required return on the stock market is 11.00%, and the risk-free rate is 4.25%. What is the difference between A's and B's required rates of return? (Hint: First find the market risk premium, then find the required returns on the stocks.)
A. 2.75%
B. 2.89%
C. 3.05%
D. 3.21%
E. 3.38%
Answer: E
You might also like to view...
A relationship’s ______ include physical objects such as mementos or photographs, nicknames for the other person, and songs that both individuals found pertinent in a special moment.
a. private practices b. connectivity creations c. symbolic practices d. sentimental values
Saul is a fisherman in his small village. Skyler, his wife, was tired of him missing dinner. She decided to display a red light on her front porch of the little house by the sea to alert him when dinner was ready. Every time he saw the red light, he felt hungry, and he immediately went home. This is an example of ______.
A. an unconditioned stimulus because he just knew when it was time for dinner B. a neutral stimulus because the red light did not elicit a response C. a conditioned response to the red light because he was reinforced for coming home D. a conditioned response to the red light, such as feeling hunger pangs or salivating
U.S. Government Treasury bonds provide low return and low risk to investors.
Answer the following statement true (T) or false (F)
In purchasing life insurance, Kelsey concealed the fact that she has a muscular disease. The insurance company can void the policy if the muscular disease is found to be a material fact
a. True b. False Indicate whether the statement is true or false