Use the Information for the Question(s)below

question 4

Multiple Choice

Use the information for the question(s) below.
Suppose that the risk-free rate is 5% and the market portfolio has an expected return of 13% with a volatility of 18%.Monsters Inc.has a 24% volatility and a correlation with the market of .60,while California Gold Mining has a 32% volatility and a correlation with the market of -.7.Assume the CAPM assumptions hold.
-Monsters' beta with the market is closest to:

• A)1.3.
• B)1.0.
• C)0.6.
• D)0.8.

---

Definitions:

Balance Sheet

A financial statement that reflects the financial position of a company at a specific point in time, detailing assets, liabilities, and owners' equity.

Vertical Analysis

A method of financial statement analysis where each entry for a given period is presented as a proportion of a fixed line item.

Total Assets

The sum of all assets owned by a company, including cash, inventory, and property.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.