1. Which portfolio had the highest average annual return in real terms between 1900 and 2014? A. Portfolio of U.S. common stocks B. Portfolio of U.S. government bonds C. Portfolio of Treasury bills D. None of the answers 2. Assume the following data: Risk-free rate 4.0 percent; average risk premium-7.7 percent. Calculate the required rate of return for the risky asset (market return). A. 5.6 percent B. 7.6 percent C. 11.7 percent D. 30.8 percent 3. A portfolio includes stock X and stock Y. It has the following information, what is the expected return of this portfolio? Weights Expected return 2010 percent 80 Stock X Stock Y 20 percent A. 10 percent B. 20 percent C. 18 percent D. 14 percent 4. If the standard deviation of returns on the market is 20 percent, and the beta of a well- diversified portfolio is 1.5, calculate the standard deviation of this portfolio. A. 30 percent. B. 20 percent. C. 15 percent. D. 10 percent 5. The correlation coefficient between stock B and the market portfolio is 0.8. The standard deviation of stock B is 35 percent and that of the market is 20 percent. Calculate the covariance between the stock and the market. ()