Linke Motors Has a Beta of 1

question 75

Multiple Choice

Linke Motors has a beta of 1.30,the T-bill rate is 3.00%,and the T-bond rate is 6.5%.The annual return on the stock market during the past 3 years was 15.00%,but investors expect the annual future stock market return to be 10.75%.Based on the SML,what is the firm's required return? Do not round your intermediate calculations.

• A) 12.03%
• B) 9.86%
• C) 14.43%
• D) 14.79%
• E) 14.31%

---

Definitions:

Anti-Miscegenation

Laws or practices that prohibit interracial marriage or cohabitation between different races.

Jim Crow

A term that refers to a set of laws and practices in the southern United States that enforced racial segregation and discrimination against African Americans after the Civil War until the mid-20th century.

Mate Selection

The process by which individuals choose their partners, influenced by various factors including personal preferences, social norms, and biological considerations.

Bohemian Lifestyle

A lifestyle that is unconventional and often involved in the arts, rejecting traditional ways of living in favor of creativity, freedom, and exploration.