1 Suppose a stock had an initial price of $97 22 per share, paid a dividend of $8 4 per share during the year, and had an ending share price of $86 42 What are the percentage returns Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 0 12345 then enter as 12 35 in the answer box 1 points QUESTION 2 Based on the following information, calculate the expected returns Prob Return Recession 30 13 8 Boom 70 18 8 Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 12 345 then enter as 12 35 in the answer box 1 points QUESTION 3 You own a portfolio invested 24 24 in Stock A, 14 74 in Stock B, 22 27 in Stock C, and the remainder in Stock D The beta of these four stocks are 0 44, 0 93, 0 91, and 1 27 What is the portfolio beta Note Enter your answer rounded off to two decimal points For example, if your answer is 12 345 then enter as 12 35 in the answer box 1 points QUESTION 4 You have observed the following returns on ABC's stocks over the last five years 2 8 , 8 5 , 11 5 , 13 9 , 3 7 What is thearithmetic average returns on the stock over this five year period Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 0 12345 then enter as 12 35 in the answer box 1 points QUESTION 5 Suppose a stock had an initial price of $87 22 per share, paid a dividend of $7 3 per share during the year, and had an ending share price of $84 95 What are the percentage returns if you own 25 shares Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 0 12345 then enter as 12 35 in the answer box 1 points QUESTION 6 Suppose a stock had an initial price of $67 74 per share, paid a dividend of $9 7 per share during the year, and had an ending share price of $84 1 What are the dollar returns Note Enter your answer rounded off to two decimal points Do not enter $ or comma in the answer box For example, if your answer is $12 345 then enter as 12 35 in the answer box 1 points QUESTION 7 A portfolio is invested 45 7 in Stock A, 24 8 in Stock B, and the remainder in Stock C The expected returns are 17 1 , 31 9 , and 24 6 respectively What is the portfolio's expected returns Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 12 345 then enter as 12 35 in the answer box 1 points QUESTION 8 Calculate the expected returns of your portfolio Stock Invest Exp Ret A $237 6 2 B $662 18 2 C $1,543 26 8 Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 12 345 then enter as 12 35 in the answer box 1 points QUESTION 9 Suppose a stock had an initial price of $99 6 per share, paid a dividend of $8 8 per share during the year, and had an ending share price of $114 84 What are the percentage returns Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 0 12345 then enter as 12 35 in the answer box 1 points QUESTION 10 Calculate the expected returns of your portfolio Stock Invest Exp Ret A $220 3 9 B $879 12 1 C $212 25 1 Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 12 345 then enter as 12 35 in the answer box 1 points QUESTION 11 Suppose the returns forStock A for last six years was 4 , 7 , 8 , 2 , 9 , and 7 Compute the standard deviation of the returns Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 0 12345 then enter as 12 35 in the answer box 1 points QUESTION 12 Suppose a stock had an initial price of $84 29 per share, paid a dividend of $5 3 per share during the year, and had an ending share price of $94 61 If you own 364 shares, what are the dollar returns Note Enter your answer rounded off to two decimal points Do not enter $ or comma in the answer box For example, if your answer is $12 345 then enter as 12 35 in the answer box 1 points QUESTION 13 You own a portfolio invested 26 22 in Stock A, 14 69 in Stock B, 18 17 in Stock C, and the remainder in Stock D The beta of these four stocks are 0 87, 0 61, 0 78, and 0 86 What is the portfolio beta Note Enter your answer rounded off to two decimal points For example, if your answer is 12 345 then enter as 12 35 in the answer box 1 points QUESTION 14 You own a portfolio that has $1,900 invested in Stock A and $2,700 invested in Stock B If the expected returns on these stocks are 9 percent and 15 percent, respectively, what is the expected return on the portfolio 10 57 percent 11 14 percent 11 96 percent 12 52 percent 13 07 percent 1 points QUESTION 15 What is the beta of the following portfolio 0 98 1 02 1 11 1 14 1 20 1 points QUESTION 16 What is the beta of the following portfolio 1 08 1 14 1 17 1 21 1 23 1 points QUESTION 17 The systematic risk is same as Unique risk Diversifiable risk Asset specific risk Market risk Unsystematic risk 1 points QUESTION 18 You own a portfolio of two stocks, A and B Stock A is valued at $6,540 and has an expected return of 11 2 percent Stock B has an expected return of 8 1 percent What is the expected return on the portfolio if the portfolio value is $9,500 9 58 percent 9 62 percent 9 74 percent 9 97 percent 10 23 percent 1 points QUESTION 19 The stock of Billingsley United has a beta of 0 92 The market risk premium is 8 4 percent and the risk free rate is 3 2 percent What is the expected return on this stock 8 87 percent 9 69 percent 10 93 percent 11 52 percent 12 01 percent 1 points QUESTION 20 Portfolio diversification eliminates which one of the following Choose only one option Total investment risk Portfolio risk premium Unsystematic risk Reward for bearing risk Market risk 1 points QUESTION 21 Standard deviation measures risk while beta measures risk systematic unsystematic unsystematic systematic total unsystematic total systematic asset specific market 1 points QUESTION 22 A $36,000 portfolio is invested in a risk free security and two stocks The beta of stock A is 1 29 while the beta of stock B is 0 90 One half of the portfolio is invested in the risk free security How much is invested in stock A if the beta of the portfolio is 0 58 $6,000 $9,000 $12,000 $15,000 $18,000 1 points QUESTION 23 Semi strong form efficient markets are not weak form efficient True False 1 points QUESTION 24 If markets are efficient, the difference between the instrinsic value and the market value of the comapny's security is negative positive zero 1 points QUESTION 25 Suppose the real rate is 4 24 and the inflation rate is 5 17 Solve for the nominal rate Use the Fisher Effect formula Note Enter your answer in percentages rounded off to two decimal points Do not enter in the answer box For example, if your answer is 0 12345 then enter as 12 35 in the answer box

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1 Suppose a stock had an initial price of $97.22 per share, paid a dividend of $8.4 per share during the year, and had an

Suppose a stock had an initial price of $97.22 per share, paid a dividend of $8.4 per share during the year, and had an ending share price of $86.42. What are the percentage returns?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 2

Based on the following information, calculate the expected returns:

Prob Return

Recession 30% 13.8%

Boom 70% 18.8%

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 3

You own a portfolio invested 24.24% in Stock A, 14.74% in Stock B, 22.27% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.44, 0.93, 0.91, and 1.27. What is the portfolio beta?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 4

You have observed the following returns on ABC's stocks over the last five years:

2.8%, 8.5%, -11.5%, 13.9%, -3.7%

What is thearithmetic average returns on the stock over this five-year period.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 5

Suppose a stock had an initial price of $87.22 per share, paid a dividend of $7.3 per share during the year, and had an ending share price of $84.95. What are the percentage returns if you own 25 shares?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 6

Suppose a stock had an initial price of $67.74 per share, paid a dividend of $9.7 per share during the year, and had an ending share price of $84.1. What are the dollar returns?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 7

A portfolio is invested 45.7% in Stock A, 24.8% in Stock B, and the remainder in Stock C. The expected returns are 17.1%, 31.9%, and 24.6% respectively. What is the portfolio's expected returns?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 8

Calculate the expected returns of your portfolio

Stock Invest Exp Ret

A
$237
6.2%

B $662 18.2%

C $1,543 26.8%

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 9

Suppose a stock had an initial price of $99.6 per share, paid a dividend of $8.8 per share during the year, and had an ending share price of $114.84. What are the percentage returns?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 10

Calculate the expected returns of your portfolio

Stock Invest Exp Ret

A
$220
3.9%

B $879 12.1%

C $212 25.1%

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 12.345% then enter as 12.35 in the answer box.

1 points

QUESTION 11

Suppose the returns forStock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%. Compute the standard deviation of the returns.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

1 points

QUESTION 12

Suppose a stock had an initial price of $84.29 per share, paid a dividend of $5.3 per share during the year, and had an ending share price of $94.61. If you own 364 shares, what are the dollar returns?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box.For example, if your answer is $12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 13

You own a portfolio invested 26.22% in Stock A, 14.69% in Stock B, 18.17% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.87, 0.61, 0.78, and 0.86. What is the portfolio beta?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

1 points

QUESTION 14

You own a portfolio that has $1,900 invested in Stock A and $2,700 invested in Stock B. If the expected returns on these stocks are 9 percent and 15 percent, respectively, what is the expected return on the portfolio?

10.57 percent

11.14 percent

11.96 percent

12.52 percent

13.07 percent

1 points

QUESTION 15

What is the beta of the following portfolio?

0.98

1.02

1.11

1.14

1.20

1 points

QUESTION 16

What is the beta of the following portfolio?

1.08

1.14

1.17

1.21

1.23

1 points

QUESTION 17

The systematic risk is same as:

Unique risk

Diversifiable risk

Asset-specific risk

Market risk

Unsystematic risk

1 points

QUESTION 18

You own a portfolio of two stocks, A and B. Stock A is valued at $6,540 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. What is the expected return on the portfolio if the portfolio value is $9,500?

9.58 percent

9.62 percent

9.74 percent

9.97 percent

10.23 percent

1 points

QUESTION 19

The stock of Billingsley United has a beta of 0.92. The market risk premium is 8.4 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?

8.87 percent

9.69 percent

10.93 percent

11.52 percent

12.01 percent

1 points

QUESTION 20

Portfolio diversification eliminates which one of the following?

Choose only one option.

Total investment risk

Portfolio risk premium

Unsystematic risk

Reward for bearing risk

Market risk

1 points

QUESTION 21

Standard deviation measures _____ risk while beta measures _____ risk.

systematic; unsystematic

unsystematic; systematic

total; unsystematic

total; systematic

asset-specific; market

1 points

QUESTION 22

A $36,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 1.29 while the beta of stock B is 0.90. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is 0.58?

$6,000

$9,000

$12,000

$15,000

$18,000

1 points

QUESTION 23

Semi-strong-form efficient markets are not weak-form efficient.

True

False

1 points

QUESTION 24

If markets are efficient, the difference between the instrinsic value and the market value of the comapny's security is:

negative

positive

zero

1 points

QUESTION 25

Suppose the real rate is 4.24% and the inflation rate is 5.17%. Solve for the nominal rate. Use the Fisher Effect formula.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.For example, if your answer is 0.12345 then enter as 12.35 in the answer box.