Author Question: The real risk-free rate is 1.8%, the expected inflation rate is 3.7%, the market risk premium is ... (Read 88 times)

Triley39 · **on:** Aug 7, 2023

Question 1

The appropriate measure of risk for all investors is how the return on an individual stock moves

with the returns of other assets in the portfolio. Which of the following best describes this

relationship?

◦

correlation

◦

covariance

◦

beta

◦

coefficient of variation

Question 2

The real risk-free rate is 1.8%, the expected inflation rate is 3.7%, the market risk premium is 5.3%, and Kohers Enterprises has a beta of 1.2. What is the required rate of return on Kohers’ stock?

◦

11.28%

◦

11.50%

◦

11.86%

◦

12.04%

reactx · **Reply #1 on:** Aug 7, 2023

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