7. Paul Pogba holds the following portfolio:

StockInvestmentBeta

A$150,0001.40

B50,0000.80

C100,0001.00

D 75,0001.20

What is Pogbas portfolio beta? (Round middle steps to at least 4 decimal places) A. 0.92 B. 1.05 C. 1.17 D. 1.31 E. 2.00

9. Randy Marsh buys both stock A worth $37, and stock B worth $22. He also SELLS SHORT both stock Z at $33, and stock Y at $42. If after one week all four stocks are priced at $30, what is his net gain or loss if he closes out all positions at $30 per share? (Hint: Short Selling is Bearish)

A. $16 loss B. $14 loss C. $0 break-even D. $16 gain E. $30 gain

10. Gordon Bombay Co.s stock has a beta of 1.20, the U.S. Treasury Bill rate is 4.25%, and the average market return is 7.50%. What is the Bombays required rate of return according to the CAPM?

A. 8.15 percent

B. 9.65 percent

C. 11.95 percent

D. 12.25 percent

E. 13.25 percent