1A) The XYZ Stock has an expected return of 12% and a standard deviation of 8%. Assuming that returns are adequately explained by a normal distribution, what is the range of return you would expect to see 95% of the time?

	a.	-12% to 36%
	b.	0% to 16%
	c.	4% to 20%
	d.	-4% to 28%

1B) Which of the following statements correctly explains the coefficient of variation (CV)?

(1) The CV is a relative measure of risk/return.

(2) The CV is an absolute measure of risk/return.

(3) The higher the CV value the more acceptable the risk/return profile for a risk-averse investor.

(4) The lower the CV value the more acceptable the risk/return profile for a risk-averse investor.

	a.	1 and 3
	b.	2 and 3
	c.	2 and 4
	d.	1 and 4

1C) The common stock of Finn Ice Cream Company has a beta 1.2. The market premium is 6% and the risk-free rate is 4%. What is the required rate of return on this stock (using the CAPM)?

	a.	12.0%
	b.	11.2%
	c.	10.0%
	d.	6.4%

1D) What type of risk might be contained in a 20-year U.S. treasury bond?

(1) Marketability risk

(2) Reinvestment risk

(3) Purchasing-power (inflation) risk

(4) Default risk

	a.	2 only
	b.	2, 3, and 4
	c.	2 and 3
	d.	1 and 2