An Investor Currently Holds the Following Portfolio

question 49

Multiple Choice

An investor currently holds the following portfolio:

If the risk-free rate of return is 2% and the market risk premium is 7%,then the required return on the portfolio is

• A) 14.91%.
• B) 15.93%.
• C) 21.91%.
• D) 23.93%.

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Definitions:

Salary Premium

Additional compensation over the base salary, often given for specialized skills, exceptional performance, or high-demand roles.

Negotiated

Involves discussions and arrangements made between parties to reach a mutual agreement.

Persuaders

Individuals or entities that influence others to change their thoughts, beliefs, or actions through various means of communication.

Perceived

Refers to how situations, actions, or conditions are interpreted or understood by an individual, often influenced by personal biases or experiences.