CSL, a Pharmaceutical Company, Has a Beta of 1

question 35

Multiple Choice

CSL, a pharmaceutical company, has a beta of 1.2, and Woolworths has a beta of 0.8. The risk-free rate of interest is 4% and the market risk premium is 7%. What is the expected return on a portfolio with 40% of its money in CSL and the balance in Woolworths?

• A) 10.01%
• B) 11.85%
• C) 10.72%
• D) 9.91%

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Definitions:

Plaintiff's Conduct

The actions or behavior of a plaintiff that are considered in legal proceedings, especially in determining negligence or liability.

Reasonableness Test

A legal principle used to evaluate whether a decision or action is rational, fair, and sensible within a specific context.

Warning Adequately

A sufficient alert or indication given to inform individuals of a potential danger or risk, ensuring they are properly informed to take preventive measures.

Design Defect

A flaw in the planning or design of a product that makes it unsafe or ineffective for its intended use.