Suppose Carz common stock has a market factor beta of .9, the risk-free rate is 3.5 percent, inflation is expected to be 2.6 percent, and the expected market risk premium is 7.2 percent. What is the expected return based on the one-factor arbitrage pricing model?

The question is missing below options:

a.13.05%

b.9.98%

c.7.72 %

d.12.32%

e.12.58%

The correct option is B,9.98%

Explanation:

A one-factor arbitrage pricing model is equivalent capital asset pricing model since the market beta is only one provided,hence the formula for capital asset pricing model is given as:

ans.

heterothermic organisms include those organisms that can switch between homeothermic (having body temperature higher than environment) and poikilothermic (having variation in internal body temperature) strategies.

some migratory birds show heterothermy as they decrease their metabolic rate during cold nights to keep their body temperature low. drop in metabolic rate allows increase in production efficiency of birds that reduces the internal body temperature to make it equal to external cold temperature during cold nights.

thus, the correct answer is 'birds allow their temperature drop in order to increase their production efficiency.'