Table 8.2 You Are Going to Invest $20,000 in a Portfolio Consisting

question 76

Multiple Choice

Table 8.2
You are going to invest $20,000 in a portfolio consisting of assets X, Y, and Z, as follows:
-What is the expected market return if the expected return on asset X is 20 percent, its beta is 1.5, and the risk free rate is 5 percent?

• A) 5.0%
• B) 7.5%
• C) 15.0%
• D) 22.5%

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Definitions:

Reverse Stock Split

A corporate action in which a company reduces the number of its existing shares to increase the share price without changing the company's valuation.

Stock Repurchase

A situation where a company buys back its own shares from the marketplace, potentially increasing the value of remaining shares.

Stock Dividend

A dividend payment made in the form of additional shares rather than a cash payout.