SeeBreeze Incorporated has a beta of 1.0.If the expected return on the market is 15%,what is the expected return on SeeBreeze Incorporated's stock?
A) 15%
B) 14%
C) 18%
D) cannot be determined without the risk free rate

Question

Quizplus · Accepted Answer

SeeBreeze Incorporated's beta is 1.0, which means that the expected return on its stock is the same as the expected return on the market, in this case, 15%. Therefore, the correct answer is A) 15%. The risk-free rate is not needed in this calculation as beta already accounts for the riskiness of SeeBreeze's stock relative to the market.

SeeBreeze Incorporated Has a Beta of 1