Suppose You Forecast That the Market Index Will Earn a Return

question 44

Multiple Choice

Suppose you forecast that the market index will earn a return of 12% in the coming year.Treasury bills are yielding 4%.The unadjusted $\beta$ of Mobil stock is 1.50.A reasonable forecast of the return on Mobil stock for the coming year is _________ if you use a common method to derive adjusted betas.

• A)15.0%
• B)15.5%
• C)16.0%
• D)14.7%

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Definitions:

Predefined Method

A function or procedure provided by a programming language or library, designed to perform a specific task.

Method Body

The Method Body in programming languages is the block of code within a method that defines what actions the method will perform.

Primitive Data Type

Primitive data type is a basic type of data provided by programming languages, such as int, float, and char, which represent numbers, characters, or boolean values.

Formal Parameter

A formal parameter is a variable used in a function or method definition, representing the inputs with which the function/method can work.