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QUESTION 4 Suppose you forecast that the market index will earn a return of 12% in the coming year. Treasury bills are yielding 4%. The

QUESTION 4

  1. Suppose you forecast that the market index will earn a return of 12% in the coming year. Treasury bills are yielding 4%. The unadjusted of Mobil stock is 1.30. A reasonable forecast of the return on Mobil stock for the coming year is _________ if you use a common method to derive adjusted betas.

    A.

    15.0%

    B.

    15.5%

    C.

    16.0%

    D.

    14.6%

    E.

    None of the above

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