1.What happens to the expected portfolio return if the portfolio beta increases from 1 to 2, the risk-free rate decreases from 5% to 4%, and the market risk premium remain at 8%?

A.It increases from 12% to 16%.

B.It increases from 13% to 16%.

C.It increases from 12% to 19%.

D.It increases from 13% to 20%.

2.You invest $100 in a portfolio of stock ABC and a treasury bill with a sure rate of 5%. ABC has an expected return of 12% and a standard deviation of 10%. Your portfolio's expected value will be $115 if you ___.

A.Invest $33.33 in ABC and $66.67 in the risk-free asset

B.Borrow $33.33 at the risk-free rate and invest $133.33 in ABC

C.Invest $80 in ABC and $20 in the risk-free asset

D.Borrow $42.86 at the risk-free rate and invest $142.86 in ABC

3.ABC stock has both call and put options available with the same strike price but with two different expiration months, June and September.Among these options, the call option with the ___ expiration month and the put option with the ___ expiration month will have the greatest value.

A.September; September

B.June; September

C.June; June

D.September; June