Question
2. Currently the S&P is returning 10% while Treasury bills are returning 3%. The beta for MNG stock is estimated to be 1.6. What is
2. Currently the S&P is returning 10% while Treasury bills are returning 3%. The beta for MNG stock is estimated to be 1.6. What is the required rate of return on this stock?
3.
Beta measures the responsiveness of a(the) _____ to changes in a(the) _____ with a beta greater than 1 indicating _____ risk than the market.
| Stock; market; more | ||
| Stock; market; less | ||
| Market; stock; more | ||
| Market; stock; less |
4. CAPM is based on the concept that investors should earn a return that is equal to _____.
| A TVM premium to compensate for greediness and an inflation premium to compensate for inflation | ||
| A TVM premium to compensate for greediness and a risk premium to compensate for total risk | ||
| A riskless return to compensate for greediness and a risk premium to compensate for systematic risk | ||
| A riskless return to compensate for greediness and a risk premium to compensate for unsystematic risk |
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Corporate Finance
Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe
13th Edition
1260772381, 978-1260772388
