Use the Table for the Question(s)below

question 57

Multiple Choice

Use the table for the question(s) below.
-Suppose a risky security pays an average cash flow of $100 in one year.The risk-free rate is 5%,and the expected return on the market index is 13%.If the returns on this security are high when the economy is strong and low when the economy is weak,but the returns vary by only half as much as the market index,then the price for this risky security is closest to:

• A)$88.
• B)$92.
• C)$93.
• D)$95.

---

Definitions:

Adjusting

The process of modifying or adapting one's behavior or attitude in response to external conditions or internal feedback.

Last-borns

Refers to the youngest child in a family, who may experience different parental expectations, responsibilities, and dynamics compared to their older siblings.

First-borns

Refers to individuals who are the oldest children in their families, often associated with specific personality traits and responsibilities.

Restless Sleepers

Individuals who experience difficulty in achieving or maintaining sleep, often resulting in insufficient sleep quality or duration.