If the ICAPM Beta Is 0 $6.0 \%$ B) $8.8 \%$

question 26

Multiple Choice

If the ICAPM beta is 0.8,and the world market return and risk-free rate are 12% and 5% respectively,then the expected return predicted by the ICAPM is:

• A) \( 6.0 \% \)
• B) \( 8.8 \% \)
• C) \(10.6 \% \)
• D) \( 12.4 \% \)

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Definitions:

Pure Competition

A market structure characterized by a large number of small firms, a homogeneous product, and very easy entry and exit conditions, leading to price-taking behavior.

Advertising

Advertising is a marketing communication strategy used to promote or sell a product, service, or idea through various media channels.

Market Models

Theoretical frameworks that describe how different market structures operate, including competition, monopolies, and oligopolies.

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for significant product differentiation and some control over price.