10 points Save Answer Question 1 You expect Budweiser will pay dividends of 1.50 in one year, 2.50 in two years, and 3.50 in three years. From that point onwards, dividends will grow at 5% per year. Investors' required rate of return is 12%. According to the Dividend Discount Model, what should be Budweiser's stock price?" 10 points Save Answer Question 2 With a defined contribution retirement plan, the employee is responsible for making contributions to the plan and selecting the manner in which those funds will be invested." True False 10 points Save Answer Question 3 A 529 plan is: A defined contribution retirement plan offered by not-for-profit institutions. A type of retirement plan that individuals can make use of, regardless of whether they are covered by a retirement plan at work." The savings account component in a Health Savings Account An account that allows you to purchase life insurance with before-tax dollars A tax-sheltered savings account for higher education expenses 10 points Save Answer Question 4 The diversification thumb rule is that a portfolio with 20 well-chosen securities will usually achieve most of the benefits of diversification. True False 10 points Save Answer Question 5 Assume that you formed a portfolio by investing $10,000 in Bank America and S15,000 in the S&P 500. Below is information on three "states of nature" and the return that you would see over the next year from each security in each state of nature. What will be the variance of returns for your portfolio? Probability of "state" Bank of America S&P 500 1/3 1/3 1/3 18 06 -.08 12 a..0057 b..0045 C. .0032 d..0027 e..0039 10 points Save Answer Question 6 "Assume that Microsoft common stock has a Beta of 1.2, the risk-free rate of interest is 3.5% and the market risk premium is 5%. According to the CAPM, what should be investors required rate of return for Microsoft stock?" 9.50% 5.30%