1. Given the following information, calculate the firms beta:

Expected Return: 9%

Risk Free Rate: 6%

Market Return: 11%

Market Risk Premium: 5%A)

0.27

B)

1.74

C)

0.60

D)

1.80

E)

1.00

2. If you bought a stock for $113 and sold it for $145 after a year, you also received a dividend of $5 in that year. What was the RETURN you received over the year?

A)25.5% B)32.7% C)3.4% D)-5.7% E)28.3% 3.Which of the following is NOT a risk associated with bonds? A)Default Risk B)Interest Rate Risk C)Reinvestment Risk D)Ratings Upgrade Risk E)Prepayment Risk

4.If a stock has a beta of 2, what can one infer about the expectations of that stock relative to the market? A)The stocks expected return will be equal to that of the market in two years. B)The stock's expected return is equal to that of the market. C)The stock is as risky as the market. D)The stock will tend to double market movements, both up and down. E)The stock will tend to have movements equal to the market.

5.Calculate the expected return for Nittany Corp, using the Capital Asset Pricing Model. Risk free rate: 6% Market Return: 13% Beta 1.1 A)14.3% B)6.6% C)13.7% D)13% E)20.3%

6.Given the following information, calculate the present value of the following bond that pays semi-annual coupons. Coupon Rate: 4% Interest Rate: 6% Maturity: 9 years A)$862 B)$922 C)$1,138 D)$567 E)$728