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%

---

Definitions:

Golden Rule

A moral or ethical principle that suggests treating others as one would wish to be treated themselves, often emphasized in various religious and philosophical traditions.

Inverted Pyramid

A method of writing used in news articles where information is presented in descending order of importance.

Op-Eds

Opinion pieces that usually concern current issues.

White Papers

Detailed reports or guides designed to educate or persuade stakeholders about a particular issue, solution, or product, often used in marketing and policy discussions.