Question
Assume that the market is in equilibrium and that stock betas can be estimated with historical data. The returns on the market, the returns on
Assume that the market is in equilibrium and that stock betas can be estimated with historical data. The returns on the market, the returns on United Fund (UF), the risk-free rate, and the required return on the United Fund are shown below. Based on this information, what is the required return on the market, rM?
| Year | Market | UF |
| 2011 | 9% | 14% |
| 2012 | 11% | 16% |
| 2013 | 15% | 22% |
| 2014 | 5% | 7% |
| 2015 | 1% | 2% |
| rRF: 7.00%; | rUnited: 15.00% | |
| a. | 12.95% | |
| b. | 12.33% | |
| c. | 10.57% | |
| d. | 11.13% | |
| e. | 11.72% |
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Military Finances Personal Money Management For Service Members Veterans And Their Families
Authors: Cheryl Lawhorne-Scott, Don Philpott
1st Edition
144222214X, 978-1442222144
