1.You paid $10 last year for a share of stock. You now collect a dividend of $1 and then sell the stock for $10.50. Which of the following is NOT correct?

A.The dividend yield is 10%.

B.The rate of return is 15%.

C.All of the statements are true.

D.The total rate of return is $1.50

E.The capital gain yield is 5%.

2.Stock X has a variance of 1% (0.01) and stock Y has a variance of 4% (0.04). What are their respective standard deviations?

A.1% and 2%.

B.None of the answers is correct.

C.10% and 20%.

D.2% and 4%.

E.10% and 14.1%.

3.The expected rate of inflation is 1.5%, the yield on risk-free Treasury Bills is 2.5%, the yield on long-term Treasury Bonds is 4.5%, and the expected return on the Total Stock Market Index is 7.0%. What is the expected Total Stock Market risk premium?

A.5.5%.

B.1.0%

C.4.5%.

D.7.0%.

E.2.0%