17. A portfolio consists 20% of a risk-free asset and 80% of a stock. The risk-free return is 4%. The stock has an expected return of 15% and a standard deviation of 30%. Whats the expected return

A. 12.8%

B. 9.5%

C. 15.0%

D. 4.0%

18. The stock of Alpha Company has an expected return of 0.10 and a standard deviation of 0.25. The stock of Gamma Company has an expected return of 0.16 and a standard deviation of 0.40. The correlation coefficient between the two stocks return is 0.2. If a portfolio consists of 40% of Alpha Company and 60% of Gamma Company, whats the expected return of the portfolio?

A. 0.126

B. 0.136

C. 0.160

D. 0.130

19. You have the following data on the securities of three firms: Return last year Beta Firm A 10% 0.8 Firm B 11% 1.0 Firm C 12% 1.2 If the risk-free rate last year was 3%, and the return on the market was 11%, which firm had the best performance on a risk-adjusted basis?

A. Firm A

B. Firm B

C. Firm C

D. There is no difference in performance on a risk-adjusted basis

20. An investor has $10,000 invested in Treasury securities and $15,000 invested in stock UVW. UVW has a beta of 1.2. What is the beta of the portfolio?

A. 0.00

B. 0.72

C. 1.20

D. 1.60