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:

Problem-Oriented

A methodological approach focusing on identifying, analyzing, and solving specific problems.

Irrational Beliefs

Beliefs that are not based on reason or logical thinking, often leading to negative emotional states or behaviors.

Ellis

Refers to Albert Ellis, an American psychologist and psychotherapist known for developing Rational Emotive Behavior Therapy (REBT).

Punctuality

The state or quality of being on time.