Question: QUESTION 9 If the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert Corp. is 1.2, what

QUESTION 9

  1. If the expected return from the market is 18%, the risk-free rate is 11%, and the beta of Loschert Corp. is 1.2, what is the required rate of return on Loschert's stock?

    a.

    13.20%.
    b.

    8.40%.
    c.

    11.00%.
    d.

    19.40%.

QUESTION 10

  1. An example of systematic (systemic) risk is when a company's stock market value declines due to:

    a.

    A strike at the company's manufacturing plant.
    b.

    Rising inflation.
    c.

    Statements by the company's president.
    d.

    A product recall.

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