10. Which one of the following is an example of market risk? A firms just launched...

10. Which one of the following is an example of market risk?

		A firms just launched a new product.
		The unemployment rate drops to 3.8%.
		A firm faces new lawsuit from its customers.
		A firm fires its CEO.

2).

A stock is expected to return 8% in an economic boom, 5% in a normal economy, and 3% in a recessionary economy. Which one of the following will decrease the overall expected rate of return on this stock?

		An increase in the probability of a recession occurring
		An increase in the rate of return in a booming economy
		An increase in the probability of an economic boom
		An increase in the rate of return in a recessionary economy

3).

Which one of the following is the slope of the security market line?

		Risk-free rate
		Market risk premium
		Beta coefficient
		Market rate of return

Solutions

Expert Solution

jeff jeffy answered 9 months ago

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