VM Inc Has an Estimated Beta of 1

question 78

Multiple Choice

VM Inc. has an estimated beta of 1.08. Given a forecasted market return of 10% and a T-bill rate 2%, using the index model and the adjusted beta, what is the forecasted return?

• A) 12.7%
• B) 10.4%
• C) 9.5%
• D) 7.8%

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