17. Which of the following statements is True? a. Stocks may not have negative betas b. The higher the standard deviation, the more certain the c. Standard deviation measures total risk rate of return in any one given year e. The greater the standard deviation, the lower the risk 18. Bear Company has a beta of .79. The market risk premium, is 8%. The expected return on the market is 14%. what is the required return for Bear Company a. b. c. d. e. 13.01% 15.52% 14.27% 11.41% 12.32% 19. The risk premium for an individual security is computed by a. b. c. d. e. dividing the market risk premium by the beta of the security dividing the market risk premium by the quantity (1-beta). multiplying the security's beta by the market risk premium. multiplying the security's beta by the risk-free rate of return. adding the risk-free rate to the security's expected return. 20. Which of the following is true when investing? a. b. c. d. e. You will not be compensated for taking Market Risk You will be compensated for Diversifiable Risk You will be compensated based on Total Risk You will not be compensated for taking Firm Specific Risk You will not be compensated for taking Systematic Risk You buy 1,000 shares of Ram stock for $80 per share. You hold the stock for 1 year. During the year, Ran paid $2.75/share in dividends, and at the end of the year, you sell Ram for $84/share. What is your percent return on this investment? 21. a. 8.44% b. 3.44% c. 5.79% d. 5.00% e. 6.14% 22. The is a graphical representation of the CAPM. a. reward-to-risk ratio. b. security market line. c. portfolio weight. d. portfolio risk e. market risk premium