What Return Should Be Expected from Investing in the Market

question 110

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 30% of additional funds borrowed at the risk-free rate of 6%?

• A) 18.6%
• B) 19.6%
• C) 21.6%
• D) 24.0%

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Definitions:

Dry Cleaning

A method of cleaning clothes and textiles using a chemical solvent rather than water.

Air Pollutants

Substances in the air that can cause harm to humans and the environment, including gases like carbon monoxide and particulate matter.

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The price at which the quantity of goods supplied equals the quantity of goods demanded in a market.

General R&D

Research and development activities aimed at broadening knowledge or creating new theories, rather than focusing on specific applications.