Question
15. A $36,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 1.29 while the beta of stock
15. A $36,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 1.29 while the beta of stock B is 0.90. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is 0.58?
| $6,000 |
| $9,000 |
| $12,000 |
| $15,000 |
| $18,000 |
16. The stock of Billingsley United has a beta of 0.92. The market risk premium is 8.4 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?
| 8.87 percent |
| 9.69 percent |
| 10.93 percent |
| 11.52 percent |
| 12.01 percent |
17. Portfolio diversification eliminates which one of the following?
Choose only one option.
| Market risk |
| Total investment risk |
| Reward for bearing risk |
| Unsystematic risk |
| Portfolio risk premium |
18. The systematic risk is same as:
| Unique risk |
| Diversifiable risk |
| Asset-specific risk |
| Market risk |
| Unsystematic risk |
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The Company Valuation Playbook Invest With Confidence
Authors: Charles Sunnucks
1st Edition
1838470816, 978-1838470814
