Suppose That the British Stock Market Is Segmented from the Rest

question 57

Multiple Choice

Suppose that the British stock market is segmented from the rest of the world.Using the CAPM and a risk-free rate of 5 percent,estimate the equity cost of capital for Stansfield. Correlation Coefficients
Stansfield England World SD(%) $\mathcal { R }$ %
$$\begin{array} { l c c l c c } \text { Stansfield } & 1.00 & 0.90 & 0.60 & 20 & ? \\\text { England } & & 1.00 & 0.80 & 18 & 14 \\\text { World } & & & 1.00 & 15 & 12\end{array}$$

• A)14 percent
• B)12 percent
• C)9 percent
• D)none of the options

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Definitions:

Carcinogens

Substances or agents that can cause cancer by altering cellular metabolism or damaging DNA directly in cells.

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A type of white blood cell of the lymphocyte subtype, which plays a significant role in the immune system by producing antibodies to fight infections.

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