Calculate the Expected Return for F Inc

question 79

Multiple Choice

Calculate the expected return for F Inc.which has a beta of 1.3 when the risk free rate is 0.06 and you expect the market return to be 0.125.

• A) 12.65%
• B) 13.55%
• C) 14.45%
• D) 15.05%
• E) 16.34%

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Definitions:

Direct Output Measures

Quantitative indicators used to evaluate the amount or quality of products or services produced, providing a straightforward assessment of performance efficiency.

Rating Errors

Mistakes or biases that occur when evaluating the performance or characteristics of others, often leading to inaccurate assessments.

Central Tendency

A statistical measure that identifies the center of a data set, often represented by the mean, median, or mode.

Horn and Halo

A cognitive bias that allows one outstanding trait, either good (halo) or bad (horn), to overshadow other traits in making judgments about someone or something.