What Is the Expected Market Return If the Expected Return

question 71

Multiple Choice

What is the expected market return if the expected return on asset A is 16% and the risk-free rate is 7%? Asset A has a beta of 1.2.

• A) 9.5%
• B) 14.5%
• C) 16.5%
• D) 17.5%
• E) 20.5%

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Definitions:

Money Economy

A system where goods and services are exchanged using money as a medium, rather than through barter.

Money Economy

A system in which goods and services are traded using money as a medium of exchange rather than barter.

Barter Economy

An economic system where goods and services are exchanged directly for other goods and services without using money.

Double Coincidence

A situation in a barter system where two parties each hold an item the other wants, facilitating an exchange without the need for money.