Calculate the Expected Return for F Inc

question 27

Multiple Choice

Calculate the expected return for F Inc., which has a beta of 1.3 when the risk-free rate is 0.06 and you expect the market return to be 0.125.

• A) 12.65 percent
• B) 13.55 percent
• C) 14.45 percent
• D) 15.05 percent
• E) 16.34 percent

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Definitions:

Labor-Intensive

A process or industry that requires a large amount of labor to produce its goods or services, typically compared to the amount of capital required.

Labor-Abundant

Referring to countries or regions that have a high supply of labor relative to capital, often resulting in lower labor costs.

World Trade Organization

An international organization that regulates international trade and ensures the smooth and free flow of trade between countries.

Trade Policy

Government regulations and strategies that determine how a country conducts trade with other nations, including tariffs, trade agreements, and import/export controls.