Calculate the Expected Return for C Inc

question 35

Multiple Choice

Calculate the expected return for C Inc., which has a beta of 0.8 when the risk-free rate is 0.04 and you expect the market return to be 0.12.

• A) 8.10 percent
• B) 9.60 percent
• C) 10.40 percent
• D) 11.20 percent
• E) 12.60 percent

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Definitions:

Formal Operational Thinking

The stage in Jean Piaget's theory of cognitive development where individuals gain the ability to think abstractly, logically, and systematically.

Logical Necessity

A condition or proposition that cannot be otherwise because of the inherent nature of logic or rationality.

Metacognition

The ability to think about one’s own thought processes.

Strategic Knowledge

Involves an understanding of knowing when and why to use particular strategies for learning or problem-solving.