Albert Dreiden wants to estimate the expected return on the market. He believes
that the stock of the Hobart Materials Company is fairly valued, and gathers the
following information:
? Expected return for Hobart 7.50%
? Risk-free rate 4.50%
? Beta for Hobart 0.80
Based on this information, the estimated expected return for the market portfolio is
closest to:
A3.00%.
B3.75%.
C6.90%.
D8.25%.
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