Based on the chart of betas in Figure 10-16,

If an investment in the overall stock market was expected to return 10 percent over the next year, what return would you expect if you invested in IBM?

Transcribed Image Text:

Procter & Gamble Co Kraft Foods Inc. McDonald's Corp Merck & Co. Inc. Wal-Mart Stores Inc. Verizon Communications Inc. The Coca-Cola Company AT&T Inc. Johnson & Johnson IBM Corporation Pfizer Inc. The Travelers Companies, Inc. Exxon Mobil Corporation Intel Corporation 3M Co. 0.28 0.30 0.30 0.38 0.40 0.43 0.44 0.44 0.48 Cisco Systems Inc. 0.60 0.65 0.73 JPMorgan Chase & Co. 0.81 0.98 1.02 The Home Depot Inc. Chevron Corporation American Express Company The Boeing Company Microsoft Corporation Walt Disney Co. United Technologies Corp Hewlett-Packard Company 1.03 1.06 1.12 1.13 1.13 1.15 1.15 1.34 1.43 1.43 1.46 1.61 1.81 1.82 1.96 E. I. du Pont de Nemours & Co. General Electric Company Bank of America Corporation Caterpillar Inc. Alcoa Inc.