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.

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Definitions:

Handrails

Safety features installed alongside stairs or in corridors to provide support and stability.

Coffee Tables

Low tables typically placed in living areas in front of sofas, used to hold items such as beverages, magazines, or decorative objects.

Sharp Edges

Describes objects or materials that have a finely pointed or keen edge capable of cutting or causing injury easily.

Hazard

A potential source of harm or adverse effect on a person or environment, often requiring management to prevent accidents or injuries.