The expected return/beta relationship is used ___________.
A)by regulatory commissions in determining the costs of capital for regulated firms
B)in court rulings to determine discount rates to evaluate claims of lost future incomes
C)to advise clients as to the composition of their portfolios
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

The expected return/beta relationship is used in all of the scenarios mentioned in options A, B, and C. It is used by regulatory commissions to determine the costs of capital for regulated firms, in court rulings to determine discount rates to evaluate claims of lost future incomes, and to advise clients as to the composition of their portfolios. Therefore, option D is the correct answer.

The Expected Return/beta Relationship Is Used ___________