Use the Table for the Question(s)below

question 57

Multiple Choice

Use the table for the question(s) below.
-Suppose a risky security pays an average cash flow of $100 in one year.The risk-free rate is 5%,and the expected return on the market index is 13%.If the returns on this security are high when the economy is strong and low when the economy is weak,but the returns vary by only half as much as the market index,then the price for this risky security is closest to:

• A)$88.
• B)$92.
• C)$93.
• D)$95.

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Definitions:

Attention On Themselves

The cognitive process of focusing one's awareness on oneself, including one's thoughts, feelings, and actions.

Overestimate

To appraise something or someone more highly than is realistic or warranted.

Subjective Well-Being

An individual's self-assessment of their own happiness and life satisfaction.

Gratitude Journal

A personal diary where one records things for which they are grateful, aimed at increasing positivity and improving mental health.