1.

Which of the following possible portfolios cannot lie on the efficient frontier?

Expected Standard

Portfolio Return Deviation

1 5% 16%

2 5% 18%

3 7% 16%

4 9% 20%

	Portfolio 2 only
	Portfolio's 2 and 4
	Portfolio's 1 and 2

2.

Which of the following is true?

Question 2 options:

	A long call is the same as a short put
	A call on a stock plus a stock is the same as a put
	A short call is the same as a long put
	None of the above

3.

A stock has a beta of 0.92 and an estimated return of 11%. The risk-free rate is 3%, and the expected return on the market is 12%. According to the CAPM, this stock:

Question 3 options:

	properly valued
	undervalued
	overvalued

4.

The value of a put option at expiry is:

Question 4 options:

	Maximum of (1) zero and (2) exercise price minus stock price.
	Maximum of (1) zero and (2) stock price minus exercise price.
	Maximum of (1) zero and (2) stock price minus exercise price, minus the option premium.