1) Last year you purchased Fords stock at $18. Now it is $15. You also received $3 as the dividend for the latest year. What is your total real return if the inflation is 5%?

Multiple Choice

a) 16.67%.

b) -16.67%.

c) -5%.

d) 5%.

e) 0%.

f) -4.76%.

2)

2) What rate of return should an investor expect for a stock that has a Beta of 0.8 when the market is expected to yield 14% and Treasury bills offer 6%?

Multiple Choice

a) 12.8%

b) 11.2%

c) 9.2%

d) 12.4%