Exhibit 84
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 44

Short Answer

Exhibit 8.4
USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) $$\begin{array} { c c c c c } \text { Stock } & \text { Beta } & \text { CurrentPrice } & \text { Exp ected Price } & \text { Expected Dividend } \\\hline \mathrm { X } & 0.8 & \$ 12.50 & \$ 13.10 & \$ 0.80 \\\mathrm { Y } & 1.1 & \$ 8.25 & \$ 9.76 & \$ 0.20 \\\mathrm { Z } & 2.1 & \$ 25.70 & \$ 30.04 & \$ 0.00\end{array}$$
-Refer to Exhibit 8.4. If the expected return on the market is 11.5% and the risk-free rate of return is 4.5%, then what are the required rates of return for stocks X, Y, and Z based on the CAPM? $\begin{array}{lrrr}&X&Y&Z\\\text { a. } & 4.8 \% & 18.3 \% & 16.9 \% \\\text { b. } & 7.2 \% & 20.7 \% & 22.3 \% \\\text { c. } & 10.7 \% & 17.5 \% & 14.4 \% \\\text { d. } & 10.1 \% & 12.2 \% & 19.2 \% \\\text { e. } & 11.1 \% & 12.2 \% & 21.3 \%\end{array}$

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Definitions:

Team Cohesiveness

The extent to which group members are united in pursuing common goals and exhibit loyalty and mutual support.

Socialize

The process of interacting with others to learn norms, behaviors, and customs of a society or group.

Five Stages Of Development

A theory that outlines five distinct phases through which developing countries typically progress to achieve economic growth and stability.

Temporary Team

A temporary team is created for a specific project or task with a limited time frame, disbanded once the project is completed or the task is achieved.