Suppose That We Have Identified Three Important Systematic Risk Factors

question 20

Multiple Choice

Suppose that we have identified three important systematic risk factors given by exports, inflation, and industrial production.In the beginning of the year, growth in these three factors is estimated at
-1%, 2.5%, and 3.5% respectively.However, actual growth in these factors turn out to be 1%, -2%, and
2%) The factor betas are given by bEX = 1.8, bI = 0.7, and bIP = 1.0.The expected return on the equity
Is 6%.What would the equity's total return be if the actual growth in each of the facts was equal to
Growth expected? Assume no unexpected news on the patent.

• A)4%
• B)5%
• C)6%
• D)7%
• E)8%

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Definitions:

Developmental Delays

When a child does not reach their developmental milestones at the expected times, often indicating an underlying condition.

Gestation

The period of development from the time of fertilization of the egg until birth, in mammals.

Kangaroo Care

A method of newborn care where babies are kept skin-to-skin with a parent, typically the mother, to enhance bonding, warmth, and feeding.

Stimulation

The action of arousing or encouraging something to happen or develop, often referring to biological, emotional, or cognitive processes.