Suppose You Forecast That the Market Index Will Earn a Return

question 86

Multiple Choice

Suppose you forecast that the market index will earn a return of 12% in the coming year.Treasury bills are yielding 4%.The unadjusted β of Mobil stock is 1.50.A reasonable forecast of the return on Mobil stock for the coming year is _________ if you use a common method to derive adjusted betas.

• A)15.0%
• B)15.5%
• C)16.0%
• D)14.6%

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Definitions:

Antecubital Area

The area of the body located at the front of the elbow where veins are often prominent, making it a common site for the withdrawal of venous blood samples.

Chronic Renal Failure

A long-term condition where the kidneys progressively lose their ability to filter waste, electrolytes, and excess fluids from the body.

Dialyzed

The process of removing waste products and excess substances from the blood, commonly used in patients with renal failure.

Fluid Restriction

A medical directive to limit the amount of fluid intake in order to manage or prevent specific health conditions.