Using Solnik's (1974)ICAPM,what Is the Expected Return on an Australian $23.0\%$

question 25

Multiple Choice

Using Solnik's (1974) ICAPM,what is the expected return on an Australian security with a world market beta of 1.2 if the Australian risk-free rate is 7%,the world risk-free rate is 3.5% and the expected return on the world market portfolio is 22%?

• A)\( 23.0\% \)
• B) \( 25.2 \% \)
• C) \( 25.7 \% \)
• D) \( 29,20\% \)

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