Suppose the Domestic U $\overline { \mathcal { R } } \text { U.S. }$

question 93

Multiple Choice

Suppose the domestic U.S.beta of IBM is 1.0,that is    _U.S
?  _IMB = 1.0,and that the expected return on the U.S.market portfolio is $\overline { \mathcal { R } } \text { U.S. }$ = 12 percent,and that the U.S.T-bill rate is 6 percent.If the world beta measure of IBM is    _world
?  _IMB = 0.80 then we can say

• A)that if the U.S.markets are fully integrated with the rest of the world,IBM's cost of equity capital would be 20 percent lower than if U.S.markets were segmented.
• B)that if the U.S.markets are fully integrated with the rest of the world,IBM's cost of equity capital would be 10 percent lower than if U.S.markets were segmented.
• C)that if the U.S.markets are fully integrated with the rest of the world,IBM's cost of equity capital would be one-third lower than if U.S.markets were segmented.
• D)none of the options

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Definitions:

Personal Quality

Characteristics or attributes that define an individual’s nature, often influencing their behavior and interactions with others.

Laissez-faire Leadership

A leadership style that grants team members high degrees of freedom in how they work and make decisions, with minimal interference or direction from the leader.

Abdicating Responsibilities

The act of renouncing, giving up, or avoiding carrying out one's duties or responsibilities.

Power Wielders

Individuals or entities that hold and exercise authority or influence over others, often determining or influencing outcomes and decisions.