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

question 94

Multiple Choice

Use the following information to answer the question(s) below. The volatility of the market portfolio is 10%,the expected return on the market is 12%,and the risk-free rate of interest is 4%.
-The expected return for Rearden Metal is closest to:

• A)10.0%.
• B)11.4%.
• C)11.8%.
• D)12.0%.

---

Definitions:

Compounded Daily

Refers to the method of calculating interest where the accumulated interest is added to the principal sum every day.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Deposit

A sum of money placed into a bank account or given as initial payment or security for the purchase of an item.

Compounded Daily

The process of calculating interest on both the initial principal and the accumulated interest from previous periods on a daily basis.