1.3

HPR and excess return: Suppose that you bought a share of stock of Company ABC at $100 on January 1, 2019 and sold it at $110 on January 1, 2020. You received $5 as cash dividend just before you sold it.

1.3.a What is the HPR of this investment for you? 1.3.b Suppose the risk-free rate is 2%. What is the excess return of this investment?

2.1

Suppose a stock investment portfolio has an expected return of 20% a year. If the risk-free rate is 2% a year, and the expected return of the stock market is 10% a year.

2.1.a What is the beta of the portfolio? 2.1.b Is this portfolio aggressive or defensive?