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1:32 . LTE 464 Dothan Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 1.5% return,
1:32 . LTE 464 Dothan Inc.'s stock has a 25% chance of producing a 30% return, a 50% chance of producing a 1.5% return, and a 25% chance of producing a -16% return. What is the firm's expected rate of return? a. 7.72% b. 8.12% C. 8.55% d. 9.25% e. 9.75% Bae Inc. is considering an investment that has an expected return of 13% and a standard deviation of 10%. What is the investment's coefficient of variation? a. 0.67 b. 0.77 C. 0.81 d. 0.85 e. 0.98 Tom O'Brien has a 2-stock portfolio with a total value of $100,000. $37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.52. What is his portfolio's beta? a. 1.17 b. 1.23 C. 1.27 d. 1.33 e. 1.42 Calculate the required rate of return for Climax Inc., assuming that (1) investors expect a 2.7% rate of inflation in the future, (2) the real risk-free rate is 3.5%, (3) the market risk premium is 5.0%, (4) the firm has a beta of 1.10, and (5) its realized rate of return has averaged 15.0% over the leet02-xythos.content.blackboardcdn.com - Private
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