An Investor Was Expecting a Return of 18% on His

question 68

Multiple Choice

An investor was expecting a return of 18% on his portfolio with a beta of 1.25 before the market risk premium increased from 8 to 10%. Based on this change, what return should he now expect on the portfolio?

• A) 20.0%
• B) 20.5%
• C) 22.5%
• D)26.0%

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Definitions:

Controlling Costs

The process of monitoring and managing expenses to ensure they do not exceed budgeted amounts.

Costing Products

The process of determining the total cost involved in manufacturing or producing a product, including materials, labor, and overhead expenses.

Practical Standards

Realistic benchmarks for costs, time, or productivity that are based on actual production and operational performances, assuming normal working conditions.

Managers Attitude

The disposition or mindset of managers towards adopting business strategies, leading employees, and making decisions.