Calculate the Expected Return for a Industries Which Has a Beta

question 15

Multiple Choice

Calculate the expected return for A Industries which has a beta of 1.75 when the risk free rate is 0.03 and you expect the market return to be 0.11.

• A) 11.13%
• B) 14.97%
• C) 16.25%
• D) 22.25%
• E) 17.0%

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Definitions:

Construction Company

A business entity focused on the building of residential, commercial, or industrial structures, infrastructure projects, and associated activities.

Conditional Probabilities

The chances of an event's occurrence, predicated on the fact that another event has happened.

Bayes' Law

A theorem using probability to update predictions or beliefs in light of new evidence.

Probability Tree

A diagram that shows the possible outcomes of a series of related probabilities.