Share X and the "Market" Had the Following Returns During

question 7

Multiple Choice

Share X and the "market" had the following returns during the last three years, and the same relative volatility is expected to exist in the future: The riskless rate is rRF = 8%, and the expected return on the market is 12 percent.If equilibrium exists, what is the expected return on Share X?

• A) -4%
• B) 8%
• C) 12%
• D) 14%
• E) 16%

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