The two-factor model on a stock provides a risk premium for exposure to market risk of 12%, a risk premium for exposure to silver commodity prices of 3.5%, and a risk-free rate of 4%. The beta for exposure to market risk is 1, and the beta for exposure to commodity prices is also 1. What is the expected return on the stock?
A. 11.6%
B. 13%
C. 15.3%
D. 19.5%
D. 19.5%
Return = 3.5 + 4 + 12 = 19.5%
You might also like to view...
Short-term assets and short-term liabilities are temporary accounts
Indicate whether the statement is true or false
Indirect costs in time and money spent adjusting to a new product that competes with the old is an example of implicit ______.
Fill in the blank(s) with the appropriate word(s).
Jason, a computer programmer who often spends long periods of time working alone, is nervous about his company’s annual meeting. His work environment has caused distance and disconnection from the rest of the group. Which type of organizational culture does this scenario exemplify?
A. clan B. fragmented C. mercenary D. communal
Women outnumber men in the workplace, and their numbers are projected to grow slightly faster.
Answer the following statement true (T) or false (F)