If the All-Ordinaries Has a Beta with Respect to the World

question 1

Multiple Choice

If the All-Ordinaries has a beta with respect to the world market of 1.2,and the world market return and risk-free rate are 12% and 6% respectively,then the expected return predicted by the ICAPM for Australia is:

• A) \( 8.8 \% \)
• B) \( 10.6 \% \)
• C) \( 12.8 \% \)
• D) \( 13.2 \% \)

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Definitions:

Zooxanthellae

Symbiotic algae that live inside corals and other marine organisms, providing nutrients through photosynthesis, which is essential for reef building.

Chemical Protection

The use of chemical substances to deter predators, parasites, or pathogens.

Coevolution

The process by which two or more species reciprocally affect each other's evolution through natural selection pressures imposed by each on the other.

Goldenrod Spiders

A type of spider known for its camouflage and predation tactics, often found on goldenrod plants.