23. The stock of Martin Industries has a beta of 1.60. The risk-free rate of return is 3.0 percent and the market risk premium is 8 percent. What is the expected rate of return on Martin Industries stock?

(A) 11.0 percent

(B) 14.1 percent

(C) 16.5 percent

(D) 15.8 percent

(E) 16.0 percent

24. The linear relation between an assets expected return and its beta coefficient is the:

(A) reward-to-risk ratio.

(B) portfolio weight.

(C) portfolio risk.

(D) security market line.

(E) market risk premium.

25. A portfolio contains two assets. The first asset comprises 60% of the portfolio and has a beta of 1.0. The other asset has a beta of 1.8. The portfolio beta is

(A) 1.35

(B) 1.38

(C) 1.32

(D) 1.40

(E) 1.50