UPS, a Delivery Services Company, Has a Beta of 1

question 1

Multiple Choice

UPS, a delivery services company, has a beta of 1.6, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 6% and the market risk premium is 9%. What is the expected return on a portfolio with 40% of its money in UPS and the balance in Wal-Mart?

• A) 14.96%
• B) 15.79%
• C) 16.62%
• D) 18.28%

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Definitions:

Penal System

The network of agencies and processes established by governments to manage individuals accused and convicted of crimes, including law enforcement, courts, and correctional institutions.

Recidivism

The tendency of a convicted criminal to reoffend, often used as a measure of the effectiveness of criminal justice systems.

Radical Non-Intervention

A strategy in criminal justice which suggests that refraining from penal intervention in the lives of youths who commit crimes might lead to better outcomes than formal processing and punishment.

Moral Panic

Moral panic is a widespread feeling of fear, often an irrational one, that some evil threatens the well-being of society, leading to demands for immediate and strong actions to be taken.