USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 52

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

-Refer to Exhibit 7.4. If the expected return on the market is 11.5% and the risk-free rate of return is 4.5%, then what are the required rates of return for stocks X, Y, and Z based on the CAPM? X Y Z

• A) 4.8% 18.3% 16.9%
• B) 7.2% 20.7% 22.3%
• C) 10.7% 17.5% 14.4%
• D) 10.1% 12.2% 19.2%
• E) 11.1% 12.2% 21.3%

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Definitions:

Discount Coupons

Vouchers or codes that offer a rebate or reduction on the price of goods or services.

Grocery Store

A retail store that primarily sells food, both fresh and packaged, along with various household items.

Willingness To Pay

The maximum amount an individual is prepared to spend to procure a good or service.

Charge Customers

The act of requesting payment from consumers for goods or services provided.