Question: A stock with a beta of zero would be expected to have a rate of return equal to: a. US Tbill rate b. market rate

A stock with a beta of zero would be expected to have a rate of return equal to:

a. US Tbill rate

b. market rate

c. S&P 500 rate

d. average corporate AAA bond rate

e. average municipal AAA bond rate.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Q:

IMDB Information for US Movies : This dataset contains information about a sample of American-produced movies, including box office, genre, number of ratings, and how positive the ratings are. For...

Q:

Which of the following is NOT TRUE? 1.When the correlation coefficient between the returns on two securities is equal to 1, the risk of a portfolio is equal to the weighted average of the total risk...

Q:

Which of the following is NOT TRUE? 1.When the correlation coefficient between the returns on two securities is equal to 1, the risk of a portfolio is equal to the weighted average of the total risk...

Q:

True or False ____ 2. The security market line describes the relation of required return to the standard deviation of return. ____ 3. In the CAPM, an assets risk is measured by its co-movement with...

Q:

4. Which of the following is/are TRUE ? I. The security market line can be thought of as expressing relationships between expected required rates of return and beta. II. The b eta of the market...

Q:

Which of the following is TRUE? The security market line can be thought of as expressing relationships between expected required rates of return and beta. ( ) The beta of the market portfolio is 0. A...

Q:

Which of the following is TRUE? : The beta of the market portfolio is 0. Assume that capital asset pricing model holds. Then, a security whose expected return falls below the SML (security market...

Q:

Which of the following is TRUE ? Select only one answer. Question 1 options: A stock with a beta of zero would be expected to have a rate of return equal to market return. The security market line...

Q:

Which of the following is/are TRUE? 1. A stock with a beta of zero would be expected to have a rate of return equal to zero. II. With the ability to borrow and lend at the risk-free rate, there is...

Q:

Which of the following is false? Question 1 options: A) Sunk cost should not be included in CFFA (Cash Flows From Assets). B) Financing cost should not be included in CFFA (Cash Flows From Assets)....

Q:

1. Which of the following is false? Question 1 options: A) Sunk cost should not be included in CFFA (Cash Flows From Assets). B) Financing cost should not be included in CFFA (Cash Flows From...

Q:

Get the image of castle attached with the TMA and perform the following image processing operations on it: a) Read the castle image into MATLAB and name it as X. Plot X. (3 marks) b) Convert image X...

Q:

Capital expenditure 250,000 125,000 75,000 Cash dividends 140,000 140,000 140,000 Cash flow from operations before interest expense 750,000 780,000 800,000 5. What are debt service requirements at...

Q:

What is the entry a company records at the time it issues a $ 1 , 0 0 0 , 6 % note to one of its employees that the employee needs to repay in 6 months? ( Select all that apply. ) Multiple select...

Q:

The following Absorbance vs concentration of nitrite graph is obtained for a set of data: Absorbance Vs Concentration y = 1.6628x +0.0373 R2 = 0.9893 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0.2 0.4 0.6 0.8...

Q:

Show the major product for the following transformation: COOEt H3O" C10H100 heat (A) (B) (D) (C)

Q:

What forecasting method is best used when the data pattern exhibits variation around an average? Group of answer choices None of the above Simple Exponential Smoothing Models Naive Models Seasonal...

Q:

Why do mergers and other affiliations often lead to the consolidation of positions and reduction of the work force?

Q:

Assuming that a significant number of skilled employees are designated for layoff, how can an organization assist these workers following dismissal? Can an organization protect selected skilled...

Q:

Should a manager be able to use a reduction-in-force to rid the department of its less effective employees? Why or why not?