An Investor Was Expecting an 18% Return on Her Portfolio

question 118

Multiple Choice

An investor was expecting an 18% return on her portfolio with beta of 1.25 before the market risk premium decreased from 8 to 6%.Based on this change,what return will now be expected on the portfolio?

• A) 15.5%
• B) 20.5%
• C) 22.5%
• D) 26.0%

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Definitions:

Impressionist Paintings

Artworks from the 19th-century Impressionist movement, characterized by small, thin brush strokes, open composition, emphasis on light in its changing qualities, and ordinary subject matter.

Displayed

Shown or exhibited, often in a public or visible manner.

Tenets

Fundamental beliefs or principles that form the basis for a system of belief or actions.

Marxism

A socio-economic theory proposed by Karl Marx, advocating for class struggle and proletarian revolution to overthrow capitalism and achieve a classless society.