1. The risk-free rate is currently 3.5%, and one share of stock of a given firm is selling for $50. In one year, the price of the stock is expected to be either $47.50 or $53.75. What is the weighting factor to compute the value of a call on this stock with an exercise price of $50 using the Binomial Model? A: Negative B: 0.34 C: 0.44 D: 0.68 E: 0.88

2. A company is expected to pay $1.75 in annual dividends next year. If the anticipated annual growth rate is 4% and the current price of the stock is $25 per share, what is the expected return on this stock? A: 4.0% B: 7.0% C: 7.3% D: 11.0% E: 11.3%

3. The financial planning process include all of the following EXCEPT A: assessing the current status of the financial markets. B: analyzing the clients financial status. C: monitoring the portfolio. D: developing a policy statement. E: establishing a client-advisor relationship.

4. The efficient frontier A: contains portfolios with the highest risk for a given return. B: contains portfolios with the lowest return for a given risk. C: contains portfolios with the highest return for a given risk. D: A and B are correct, but C is not. E: A and C are correct, but B is not.