What Is the Expected Return on Asset a If It

question 31

Multiple Choice

What is the expected return on asset A if it has a beta of 0.6,the expected market portfolio return is 15%,and the risk-free rate is 6%?

• A) 12.4%
• B) 11.4%
• C) 11.8%
• D) 10.2%

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Definitions:

Aggregate Expenditure

The total amount spent on goods and services in an economy at a given level of income during a specific period.

Marginal Propensity

The ratio of the change in consumption or saving to the change in income, indicating how income changes affect spending or saving behaviors.

Aggregate Expenditure

The total amount of spending in the economy that includes consumer spending, investment, government spending, and net exports.

Multiplier

An economic factor that quantifies the change in income levels resulting from a change in spending or investment.