1. According to the following information, which of the stocks would be considered riskiest in a diversified portfolio of investments?

Stock	s	b
ABC	12.5%	1.0
FGH	8.0%	0.5
MNO	20.2%	2.4
TUV	15.3%	3.0

a.	Stock MNO, because it has the highest standard deviation.
b.	Stock TUV, because it has the highest beta.
c.	Stock FGH, because it has the highest s/b ratio
d.	Stock ABC, because its beta is the same as the market beta (1.0) and the market is always very, very risky.

1. The net income that firm earns can either be paid out to shareholders as __________ or can be reinvested in the company as __________.

a.	interest; additional paid-in capital
b.	dividends; retained earnings
c.	shares; capital stock.
d.	capital gains; additional paid-in capital
e.	interest; retained earnings

2. Shareholders exert control of the management of the firm by

a.	electing board members who can replace management.
b.	directly replacing management with themselves.
c.	buying shares in an IPO at a discounted price.
d.	running the daily operations of the firm.
e.	None of the above.

3. Velcraft Company has 20,000,000 shares of common stock authorized, but to date, has only 12,000,000 shares outstanding, each with a $1.00 par value. The company has $24,000,000 in additional paid-in capital and retained earnings are $96,000,000. What is Velcraft's current book value per share?

a.	$1.00
b.	$3.00
c.	$11.00
d.	$6.60
e.	$9.00