45. Which of the following statements is most correct? A. The slope of the security market line is beta. B. The slope of the security market line is the market risk premium, (Rm Rrf). C. If you double a companys beta its required return more than doubles. D. Statements a and c are correct. E. Statements b and c are correct. 12

46. You are scheduled to receive a $800 cash flow in one year, a $800 cash flow in two years, and you must pay $1,000 in three years. If interest rates are 8 percent per year, what is the combined present value of these cash flows? A. $168.00 B. $600.00 C. $632.78 D. $2,220.44 E. $876.34

47. You deposit $1000 today, followed by $2000 one year from today and $3000 two years from today. The interest rate in the account is 9.9% compounded quarterly. How much will you have in three years time (three years from today). A. $7081.23 B. $7063.91 C. $6405.80 D. $7039.98 E. $6000.00

48. You expect to receive $1,000 at the end of each of the next 3 years. You will deposit these payments into an account that pays 8 percent compounded annually. What is the future value of these payments, that is, the value at the end of the third year? A. $3,100.00 B. $3,246.40 C. $3,374.40 D. $3,400.96 E. $3,438.27

49. You own the following three stocks. What is the beta of your portfolio? Stocks Amount Invested Beta City $10,000 2.4 Rent N Co $9,000 1.9 Lincoln $1,000 -0.5 A. 1.27 B. 2.03 C. 1.6 D. 2.08 E. None of the above 13

50. You own these three following stocks in a portfolio. What is the expected portfolio return? Set your decimal places to 6 places. Stocks Return Weight A -2.10% 40% B 8% 30% C 6.25% 30% A. 3.435% B. 5.115% C. 12.15% D. 16.35% E. None of the above