17. Suppose that we have identified two important systematic risk factors: the growth rate of gross domestic product, labeled GDP, and the 30-year bond interest rate, labeled BR. Whole Hog Farms, Inc. has a beta 1.1 on GDP and 0.9 on BR. Whole Hog has an expected stock return of 12%. GDP is expected to be 5.5% and BR 6%. If gross domestic product grows by 3% and the 30-year bond rate turns out to be 9%, and no unexpected news specifically concerning Whole Hog occurs, within the Arbitrage Pricing Theory framework, what is your best guess for the realized rate of return on Whole Hog stock?

18. Assume two factors have been identified as the important sources of systematic risk: the growth rate in industrial production, IP, and the rate of change in the price of West Texas crude oil, OIL. Suppose also that the expected return on a well-diversified IP factor portfolio, E(rIP) is 8% and E(rOIL) is 12%. Now consider the Low Ride Automobile Co. with ?IP = 1.3 and ?OIL = -0.2. Assume rf = 6%. Within an Arbitrage Pricing Theory framework, what is the fair rate of return on Low Ride?

19. The offering price of the Titanic Fund is $18.65 per share and the fund is sold with a front-end load of 5%, what is the net asset value of this open-end fund?

22. A firm has a tax burden of .7, a leverage ratio of 1.5, an interest burden of .7, an ATO of 5, and a return on sales of 6%. What is the firm's ROE?

23. The 35 items or less express lane supermarkets has an ATO of 5, and a return on sales of 3%. What is the 35 items or less express lane supermarkets ROA?

24. Suppose that Off-Star currently is selling at $60 per share. You buy 100 shares, borrowing the maximum amount of the purchase price from your broker. If the initial margin is 50% and the maintenance margin is 25%, how low can Off-Star's price fall before you get a margin call? Assume the price fall happen immediately.

27. Bed Bug Mattress has a noncallable bond issue outstanding with a face value of $1,000 and a 10% coupon rate. The issue makes semiannual coupon payments and matures in 30 years. The bond has a yield to maturity of 12%. What should be the value of the Bed Bug Matress bonds?