What Return Should Be Expected from Investing in the Market

question 16

Multiple Choice

What return should be expected from investing in the market portfolio that 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:

Vedas

Ancient sacred scriptures of Hinduism, composed in early Sanskrit and containing hymns, philosophy, and guidance on religious practice.

Anatman

Buddhist doctrine that there is no separate self.

Eternal Atman

The concept in Hindu philosophy of the true self, or soul, which is eternal and transcends the physical body and personal identity.

Practicing Rituals

The act of performing ceremonial actions prescribed by tradition or by sacerdotal decree.