Use the Following Information to Answer the Question(s)below

question 32

Multiple Choice

Use the following information to answer the question(s) below. All amounts are in millions.
-If the risk-free rate is 3% and the market risk premium is 5%,then the CAPM's predicted expected return for Nielson Motors is closest to:

• A)8.5%.
• B)9.0%.
• C)9.5%.
• D)10.0%.

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Definitions:

Late Adopters

Individuals or groups who purchase or try new products or adopt new technologies later than the majority of consumers.

Early Majority

A segment of consumers in the diffusion of innovation theory who adopt new products or services after a careful review once they have been proven by early adopters.

Reese's Pieces

A brand of candy consisting of peanut butter filling encased in a shell of milk chocolate, marketed by The Hershey Company.

Late Majority

A category within the diffusion of innovations theory that refers to individuals who adopt a new technology or concept after the average member of a society.