UPS,a Delivery Services Company,has a Beta of 1

question 55

Multiple Choice

UPS,a delivery services company,has a beta of 1.1,and Wal-Mart has a beta of 1.0.The risk-free rate of interest is 4% and the market risk premium is 6%.What is the expected return on a portfolio with 50% of its money in UPS and the balance in Wal-Mart?

• A)10.3%
• B)9.9%
• C)11.1%
• D)12.4%

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Definitions:

Natural Immunity

The immunity one is born with, providing immediate protection from pathogens through physical barriers, like the skin, and innate immune responses.

Antibodies

Protein substances carried by cells to counteract the effect of an antigen.

Rabies

A viral disease affecting mammals, including humans, causing acute encephalitis and transmitted mainly through the bite of an infected animal.

Unvaccinated Animals

Animals that have not received vaccinations to protect them against specific diseases they are susceptible to.