An Investor Expects a Return of 14

question 47

Multiple Choice

An investor expects a return of 14.7% on her portfolio with a beta of 1.13.If the expected market risk premium decreases from 8% to 7%,what return should she now expect on the portfolio?

• A) 13.57%
• B) 13.89%
• C) 14.67%
• D) 15.87%

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Definitions:

Rationalisations

The process of reorganizing a company to increase its efficiency, often involving streamlining operations and reducing staff.

Unethical Behaviour

Actions or practices within an organisation or individual that are immoral, dishonest, or violate professional standards.

Longer Term Implications

Consequences or effects of actions or decisions that become apparent or have an impact over an extended period.

Organisational Loyalty

The commitment of employees to the goals, values, and success of their organization, often resulting in higher productivity and job satisfaction.