Use the Information for the Question(s)below

question 119

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.
-California Gold Mining's beta with the market is closest to:

• A)0.9
• B)1.25
• C)-0.9
• D)-1.25

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Definitions:

False Consensus Effect

The cognitive bias to overestimate how much other people share our beliefs, attitudes, and behaviors.

Self-serving Bias

The common habit of a person taking credit for positive events or outcomes, but blaming outside factors for negative events.

Locus Of Control Bias

A cognitive bias where an individual attributes successes and failures to either internal or external factors disproportionately.

Achievement-related Results

Outcomes or successes in tasks or goals that are valued in a cultural or societal context, often measured through performance or attainment.