Suppose You Forecast That the Market Index Will Earn a Return

question 13

Multiple Choice

Suppose you forecast that the market index will earn a return of 15% in the coming year.Treasury bills are yielding 6%.The unadjusted β of Mobil stock is 1.30.A reasonable forecast of the return on Mobil stock for the coming year is _________ if you use a common method to derive adjusted betas.

• A)15.0%
• B)15.5%
• C)16.0%
• D)16.8%
• E)none of the above

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Definitions:

Smooth Relations

The practice of maintaining harmonious and effective interactions and relationships among members within an organization.

Shared Goals

Objectives that are pursued by a group or team, requiring collaboration and cooperation for achievement.

Communicate Freely

The ability to express thoughts, feelings, or information without restraint or censorship.

Organizational Influence

The capability of individuals or groups within an organization to affect or shape decision-making, behaviors, and the organizational culture.