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1-5 I.. Multiple Choice (5 points each) 1. Asset T has a normal distribution of returns, with an expected return of 9% and a standard
1-5 I.. Multiple Choice (5 points each) 1. Asset T has a normal distribution of returns, with an expected return of 9% and a standard deviation of 5%There is a 99% probability that asset T's return will be between_ percent andpercent. A. 4, 14 C. D. -6, 24 none of the above: the correct answer is 2. Unsystematic risk A. does not change B. can be eliminated through diversification C affects all firms in a market D. all the above 3. Nico owns 100 shares of Stock X which has a price of $12 per share and 200 shares of Stock Y which has a price of $3 per share. What is the proportion of Nico's portfolio invested in stock Y? A. 33% B. 50% C. 67% D. none of the above; the correct answer is _- 4 GE Corporation's stock sells for $30 per share and has a beta of 2. Other factors being constant, if the market goes up to 10 percent, GE stock will advance to A. B. C. D. S33 $36 $60 none of the above; the correct answer is 5. Given the following expected returns and standard deviations of assets B, M, Q, and D, which asset should the prudent financial manager select? Asset Expected Return Standard Deviation 10% 16% 14% 12% 10% 9% A. Asset B B. Asset M C. Asset Q D. Asset D D PAGE 0 I0
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