1. Consider two Assets A and B. Supppose Asset A has an expected return of 10% and a standard deviation of 20%. Asset B has an expected return of 16% and a standard deviation of 40%. If the correlation between A and B is 0.35, what is tge standard deviation of a portfolio comprised of 30% Asset A and 70% Asset B?

a. 36%

b. 20%

c. 30.6%

d. 16%

2. The Fama-French Three-Factor Model argues that:

a.,Both

b. Stock's return is affected by 2 factors: p/e ratio, liquidity rate, return on equity.

c. Stock's return is affected by3 factors: market return, size effect, and the book to market effect

d. none

3. An investor requires a return of 12% on risky securities. A stock sells for $25, it pays a dividend of $1 and the dividends compound annually at 7%. what is the max amount that this investor should pay for the stock?

a. $21.40

b. $42.50

c. $27.80

d. $33.00