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

question 59

Multiple Choice

Use the following information to answer the question(s) below. The volatility of the market portfolio is 10%,the expected return on the market is 12%,and the risk-free rate of interest is 4%.
-The beta for Taggart Transcontinental is closest to:

• A)0.75.
• B)0.80.
• C)1.00.
• D)1.10.

---

Definitions:

Excess Capacity

A situation where a firm produces at a level less than its maximum output, often resulting in inefficiencies or higher production costs per unit.

Monopolistically Competitive

A market structure where many firms sell products that are similar but not identical, allowing for some degree of market power in setting prices.

Average Total Cost

The total cost of production divided by the number of units produced, indicating the cost per unit of output.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service, an essential concept for understanding optimal production levels and pricing strategies.