1A)

You are evaluating a couple of stocks to add to your investment portfolio. One of them Hooli Corp. has a stock beta of 1.59 and the other Pied Piper has a stock beta of 1.41. If you split up your portfolio and put 30% of your money in Hooli and 70 % in Pied Piper, what will the beta of your portfolio be? (Round to 2 decimals.)

a. 2.95

b. 1.97

c. 1.46

d. 0.19

e. 0.62

1B)

You are going to make a portfolio consisting of 80 % of Wizards of the Coast stock and 20 % of Lionsgate Stock. You also have the following information:

State i	Probability of State i	WOC Return	Lionsgate Return
Boom	50 %	36 %	11 %
Bust	50 %	-9 %	88 %

What is the expected return for the portfolio? (Answer as a percentage and Round to 2 decimals)

a. 21.87 %

b. 20.70 %

c. 18.51 %

d. 17.60 %

e. 23.15 %

1C)

You work as an analyst for a large charitable trust, and part of your job is to evaluate assets to add to the trusts investment portfolio. You have your eye on two stocks. The stock of The Towel Company has an expected return of 13% and the stock of Block and Tackle has an expected return of 30%. If you decide to split the trusts investment by putting 49% of your fund into The Towel Company and 51% in Block and Tackle, what would the expected return for your portfolio be? (Round to 2 decimals, and answer as a percentage.)

a. 24.07 %

b. 19.33 %

c. 21.67 %

d. 19.47 %

e. 23.77 %

ANSWER