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

question 8

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 is closest to:

• A)-4.0%.
• B)0.0%.
• C)3.2%.
• D)4.0%.

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Definitions:

Contractual Clause

A provision or condition included within a contract that specifies the obligations, rights, or duties of the parties involved.

Dream Home

A term often used to describe an ideal residence that fulfills all of the homeowner's desires and requirements.

Rescission

The act of cancelling a contract and returning the parties involved to the positions they were in before the contract was made.

Specific Performance

A legal remedy requiring a party to perform their contractual obligations when monetary damages are inadequate.