1.

What is the expected return of a portfolio that contains the following three stocks?

Stock A -- $50,000 invested -- Expected return 9.8% .049

Stock B -- $40,000 invested -- Expected return 10.1% .0404

Stock C -- $10,000 invested -- Expected return 12.3%

		9.56%
		12.5%
		7.59%
		10.17%

2.

QUESTION 7

1. Which of the following is true?

   Positively correlated stocks provide the highest level of stand alone risk aversion.

   Positively correlated stocks provide the highest level of diversification.

   Negatively correlated stocks provide the highest level of diversification.

   Negatively correlated stocks provide the highest level of stand alone risk aversion.

   3.

   QUESTION 8

   The value of a stock is the present value of the stocks future cash flows. This includes:

   		future dividends, interest received on stock, and the price received when the stock is sold.
   		Interest received on stock and the price received when the stock is sold.
   		Only future dividends
   		future dividends and the price received when the stock is sold.