What Return Should Be Expected from Investing in the Market

question 9

Multiple Choice

What return should be expected from investing in the market portfolio which is expected to yield 18% if the investment includes all of the investor's funds plus 100% of additional funds borrowed at the risk-free rate of 6%?

• A)18.6%
• B)19.6%
• C)21.6%
• D)30.0%

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Definitions:

One Week

A period of time consisting of seven consecutive days.

Frightening Experience

An event or situation that induces fear or terror, often leading to lasting psychological impact or trauma.

Apprehension

A feeling of fear or anxiety about something that might happen, often involving worry about future events or outcomes.

Physical Tension

A state of physical unease or strain often resulting from stress or exercise.