Use the Following Information to Answer the Question(s)below

question 32

Multiple Choice

Use the following information to answer the question(s) below. All amounts are in millions.
-If the risk-free rate is 3% and the market risk premium is 5%,then the CAPM's predicted expected return for Nielson Motors is closest to:

• A)8.5%.
• B)9.0%.
• C)9.5%.
• D)10.0%.

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Definitions:

Fair 6-sided Dice

A cube-shaped object with each of its six faces showing a different number of dots from 1 to 6, used in games of chance to ensure an equal probability of landing on any face when thrown.

Histogram

A graphical representation of the distribution of numerical data, showing the frequency of data points in successive fixed intervals of values.

Rolls

Cylindrical pieces of bread baked in various sizes or a list of names, typically used for recording purposes.

Normal Model

A type of statistical distribution that is symmetric, bell-shaped, and describes how continuous data points are dispersed or spread across the mean.