Exhibit 82
Use the Information Below for the Following Problem(S)
You

question 115

Multiple Choice

Exhibit 8.2
Use the Information Below for the Following Problem(S)
You expect the risk-free rate (RFR) to be 3 percent and the market return to be 8 percent. You also have the following information about three stocks.
$$\begin{array} { c c c c c } \text { Stack } & \text { Eeta } & \begin{array} { c } \text { Current } \\\text { Price }\end{array} & \begin{array} { c } \text { Expected } \\\text { Price }\end{array} & \begin{array} { c } \text { Experted } \\\text { Dividend }\end{array} \\\hline \mathbf { X } & 1.25 & \$ 20 & \$ 23 & \$ 1.25 \\\mathbf { Y } & 1.50 & \$ 27 & \$ 29 & \$ 0.25 \\\mathbf { Z } & 0.90 & \$ 35 & \$ 38 & \$ 1.00\end{array}$$
-Refer to Exhibit 8.2.What are the expected (required) rates of return for the three stocks (in the order X,Y,Z) ?

• A) 16.50%, 5.50%, 22.00%
• B) 9.25%, 10.5%, 7.5%
• C) 21.25%, 8.33%, 11.43%
• D) 6.20%, 2.20%, 8.20%
• E) 15.00%, 3.50%, 7.30%

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Definitions:

Streaming

The process of transmitting or receiving data (especially video and audio material) over the internet in a continuous flow.

Clustering

The method of categorizing a collection of items so that those within the same category are more alike to each other than they are to items in different categories.

Preferred Provider Organization

Preferred Provider Organization (PPO) is a type of health insurance plan that offers a network of healthcare providers, allowing policyholders to receive services at a discounted rate.

Health Maintenance Organization

A type of health insurance plan that typically restricts patients to a network of doctors and hospitals in order to control costs.