Answer:
Beta is 2.25
Explanation:
The return total return on the stock can be computed using the holding period return stated below:
=Pi-Po+D/Po
Pi is the expected price of the bond at year end which is $117
Po is the initial stock price of $100
D is the dividend expected at year end
holding period return=($117-$100+$1)/$100=18.00%
In Capital Asset Pricing Model,expected return formula is as follows:
expected return=risk free rate+beta*market risk premium
18.00%
=4.5%+Beta*6.0%
18.00%-4.5%=Beta*6.00%
13.500%=Beta *6.00%
Beta=13.500%
/6.00%
Beta=2.25
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I’m pretty sure the answer is B the general population because a focus group is used to gather people’s opinions, ideas, or beliefs about a certain topic or product. It would be useless to ask any of the others because they would have a biased opinion on the matter.