Use the Following Information to Answer the Question(s)below

question 8

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%.Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down.Security "Y" goes down on average by 16% when the market goes up and goes up by 16% when the market goes down.Security "Z" goes up on average by 4% when the market goes up and goes up by 4% when the market goes down.
-The expected return on security with a beta of 0 is closest to:

• A)-4.0%.
• B)0.0%.
• C)3.2%.
• D)4.0%.

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Definitions:

Public Utilities

Companies that provide essential services such as water, electricity, and telecommunications to the public, often under government regulation.

Electricity

A form of energy resulting from the existence of charged particles such as electrons or protons.

Oil

A natural fossil fuel composed primarily of hydrocarbons, used globally as a primary source of energy and in various industrial applications.

Grass-fed Beef

Beef from cattle that have been fed only grass and foraged foods throughout their lives, rather than grain.