5. the large capitalization index has a 10 percent return, then the forecast of the fund’s return will be:

A)   12.2.

B)   13.5.

C)   16.1.

D)   11.9.

The correct answer was A)

The forecast is 12.209 = 0.149 + 1.206 × 10, so the answer is 12.2.