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?

Year Market UF

2011 -9% -14%

2012 11% 16%

2013 15% 22%

2014 5% 7%

2015 -1% -2%

Risk Free Rate: 7.00% Return on United Fund: 60.00%

Select the correct answer.

a. 42.23% b. 42.13% c. 42.53% d. 42.33% e. 42.43%