The Returns from Guardian Grocers Ltd

question 3

Multiple Choice

The returns from Guardian Grocers Ltd. are approximately three-quarters as volatile as that of the market as a whole. If 90-day Treasury bills are trading at 4.2%, the expected return to the market over the next period is 7%, what is the required rate of return by shareholders for Guardian Grocers Ltd.?

• A) 4.5
• B) 5.2
• C) 6.3
• D) 7.9
• E) 9.1

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