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

question 83

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%.Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down.Security "Y" goes down on average by 16% when the market goes up and goes up by 16% when the market goes down.Security "Z" goes up on average by 4% when the market goes up and goes up by 4% when the market goes down.
-The expected return on security with a beta of 0.8 is closest to:

• A)0.0%
• B)3.2%
• C)6.4%
• D)7.2%

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Definitions:

Net Income

The total profit or loss of a company after all expenses, including taxes and interest, have been deducted from total revenue.

December

The twelfth and final month of the year in the Gregorian calendar, frequently associated with end-of-year summaries and holiday seasons.

Merchandise Purchases

The total cost of goods bought for resale during an accounting period.

Raw Materials

The basic materials and components required in the manufacturing process to produce finished goods.