1)The $10.00 million mutual fund Henry manages has a beta of 1.05 and a 9.50% required return. The risk-free rate is 4.20%. Henry now receives another $4.00 million, which he invests in stocks with an average beta of 0.65. What is the required rate of return on the new portfolio? (Hint: You must first find the market risk premium, then find the new portfolio beta.) Select the correct answer.

a. 8.76% b. 9.00% c. 8.92% d. 8.84% e. 9.08%

2)Joel Foster is the portfolio manager of the SF Fund, a $2.85 million hedge fund that contains the following stocks. The required rate of return on the market is 11.00% and the risk-free rate is 5.00%. What rate of return should investors expect (and require) on this fund? Stock Amount Beta A $1,075,000 1.20 B 675,000 0.50 C 600,000 1.40 D 500,000 0.75 2,850,000 Select the correct answer.

a. 10.86% b. 10.89% c. 10.98% d. 10.92% e. 10.95%

3)Returns for the Alcoff Company over the last 3 years are shown below. What's the standard deviation of the firm's returns? (Hint: This is a sample, not a complete population, so the sample standard deviation formula should be used.) Year Return 2010 21.00% 2009 12.50% 2008 39.60% Select the correct answer.

a. 26.37% b. 26.40% c. 26.43% d. 26.46% e. 26.49%