UPS, a Delivery Services Company, Has a Beta of 1

question 1

Multiple Choice

UPS, a delivery services company, has a beta of 1.6, and Wal-Mart has a beta of 0.9. The risk-free rate of interest is 6% and the market risk premium is 9%. What is the expected return on a portfolio with 40% of its money in UPS and the balance in Wal-Mart?

• A) 14.96%
• B) 15.79%
• C) 16.62%
• D) 18.28%

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Definitions:

Social Network Analysis

A methodological approach used to analyze social structures through the use of networks and graph theory, identifying how individuals and groups interact.

Informal Structures

Informal structures refer to the unofficial, often unacknowledged, networks and relationships that exist within an organization, influencing communication, decision-making, and social interactions.

Social Relationships

Connections between individuals based on mutual interests, social ties, or interactions that impact behavior and attitudes.

Traditional Organizational Structures

Hierarchical arrangements where authority flows from the top down, characterized by clear departmental boundaries and responsibilities.