1. Cost of capital is the maximum return that manager need to achieve when making investment decisions.

A question requiring a 'True/False answer.(Required)

True/False

2. For an unlevered firm, the cost of capital is equal to the cost of equity.

A question requiring a 'True/False answer.(Required)

True/False

3. If there is one asset that everyone wants to invest, it should be market portfolio.

A question requiring a 'True/False' answer.(Required)

True/False

4. The beta of market portfolio is equal to 2.

A question requiring a 'True/False' answer.(Required)

True/False

5. Sudden death of a CEO is a systematic risk.

A question requiring a 'True/False' answer.(Required)

True/False

6. Unexpected monetary policy is a unsystematic risk

A question requiring a 'True/False answer.(Required)

True/False

7. By holding a market portfolio, you can eliminate systematic risk.

A question requiring a 'True/False' answer.(Required)

True/False

8.Beta measures a security's sensitivity to market movements.

A question requiring a 'True/False' answer.(Required)

True/False

9. When market portfolio increase (decrease) by 10%, security A increase (decrease) by 5%, the beta of security A is 2.

A question requiring a 'True/False' answer.(Required)

True/False

10. CAPM describes the relationship between and expected return for stocks.

A question requiring a 'True/False' answer.(Required)

True/False

11. Please use CAPM to estimate the cost of equity for (Marubeni Corporation).

The beta of is 1.45

Averaged market risk premium is 5%.

Risk-free interest rate is 0.087% (10 year Japanese government bond yield)

The expected return for Marubeni' shareholder (cost of equity) is

A multiple-choice question with one possible answer.(Required)

1. 0.126%
2. 6.343%
3. 5.087%
4. 7.337%
5. 7.25%
6. 7.557%