Research Has Identified Two Systematic Factors That Affect U

question 34

Multiple Choice

Research has identified two systematic factors that affect U.S. stock returns. The factors are growth in industrial production and changes in long-term interest rates. Industrial production growth is expected to be 3%, and long-term interest rates are expected to increase by 1%. You are analyzing a stock that has a beta of 1.2 on the industrial production factor and .5 on the interest rate factor. It currently has an expected return of 12%. However, if industrial production actually grows 5% and interest rates drop 2%, what is your best guess of the stock's return?

• A) 15.9%
• B) 12.9%
• C) 13.2%
• D) 12%

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Definitions:

Orgasm

The climax of sexual activity, characterized by intense physical pleasure and release of tension.

Self-Gratification

The act of satisfying or fulfilling one's own desires and needs, often used in the context of seeking pleasure or happiness.

Masturbation

The sexual stimulation of one's own genitals for sexual arousal or pleasure, often resulting in orgasm.

Cause Insanity

This is not a recognized medical or psychological term; sanity or mental health conditions are complex and can be influenced by numerous factors, and the phrase "cause insanity" oversimplifies this complexity. NO.