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:

Hormone

A chemical messenger produced by glands in the body that regulates physiological processes and behavior.

Milk Market

A sector of the economy that deals with the production, distribution, and consumption of milk and milk products.

Equilibrium Price

The cost at which the amount of a product wanted by buyers matches the amount provided by sellers, leading to equilibrium in the market.

Demand

The quantity of a good or service that consumers are willing and able to purchase at various prices during a given time period.