Under the Following Conditions, What Are the Expected Returns for Stocks

question 59

Multiple Choice

Under the following conditions, what are the expected returns for stocks Y and Z? $$\begin{array} { l l } \lambda ^ { 0 } = 0.05 & b _ { y , 1 } = 0.75 \\k _ { 1 } = 0.06 & b _ { y , 2 } = 1.35 \\k _ { 2 } = 0.05 & b _ { z , 1 } = 1.5 \\& b _ { z , 2 } = 0.85\end{array}$$

• A)17.61% and 13.23%
• B)16.25% and 18.25%
• C)13.24% and 28.46%
• D)14.83% and 17.69%
• E)None of the above

---

Definitions:

Strategic Planning

The procedure of defining a business's direction and making decisions on allocating its resources to pursue this direction.

Convert Weaknesses

Convert Weaknesses is a strategic approach aimed at identifying and transforming limitations or disadvantages of a business into strengths or competitive advantages.

Key Threats

Primary external challenges or obstacles that could negatively impact an organization's ability to achieve its strategic objectives.

Limitations

Restrictions or constraints that impact the scope, effectiveness, or outcomes of a project, research study, or business strategy.