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

question 83

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 0.8 is closest to:

• A)0.0%
• B)3.2%
• C)6.4%
• D)7.2%

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Definitions:

Daily Management Oversight

Continuous supervision of daily operations and activities within an organization to ensure efficiency and goal attainment.

Full Capacity

The maximum level of output that a company can sustain over a period of time without incurring unacceptable delays or costs.

Maximum Level of Sales

The highest amount of sales a company can achieve with its current resources and capacity before needing to expand.

Debt-Equity Ratio

A metric used to evaluate the proportional use of equity and debt in the financing of company assets.