What is the area of the figure determined by this system of inequalities?
-4<=x<=0
-6<=y<=0
A. 6
B. 15
C. 24
D. 28

14.95%

Explanation:

First we will determine the market risk premium which shall be calculated as follows:

Market risk premium=Expected annual return of market-Risk free return

In the given question

Expected annual return of market=13%

Risk free return=Return on T-Bonds=6.5%

Market risk premium=13%-6.5%=6.5%

Based on above Market risk premium, the firm required return shall be calculated as follows:

Firm required return=Risk free return+Beta*Market risk premium

                                   =6.5%+1.30*6.5%

                                   =14.95%