A stock has a beta of 0.5. The market risk premium is 6% pa and the risk free rate is 2% pa, both given as effective Answer saved dilludi Tdtes. Which of the below statements is NOT correct? Select one: a. The market portfolio's total required return is 8% pa and this is also its expected total future return if it's fairly priced. b. The stock's required total return is 4% pa and this is also its expected total future return if it's fairly priced. c. If the market portfolio suddenly fell by 3% in the last 5 minutes, then the stock's price would be expected to fall by 1.5% over that same short time. d. If the market portfolio's total return was 10% over the last year, then the stock's total historical return is expected to be 8% over the same one year period. Note the following definitions: -'Price' is the firm's share price; -'Earnings' is the firm's total earnings; -Shares' is the total number of shares; - EPS' is earnings per share, which equals total earnings divided by total number of shares; --Market cap' is the equity market capitalisation, which equals share price multiplied by the total number of shares. Finance terminology is often inexact. The PE or 'price to earnings' ratio would be more accurately named if it was called the: Select one: a. Price to shares ratio. b. Price to EPS ratio. c. Market cap to EPS ratio. d. EPS to shares ratio. e. Earnings to shares ratio. A valuer is making a pro-forma income statement and balance sheet. The profit has been forecast in the income statement based on the percent-of-sales method. Now the valuer is thinking about how that profit should affect the balance sheet. Which balance sheet account is directly affected by profit? Select one: a. Contributed equity. b. Retained earnings. c. Reserves. d. Dividends. e. Buybacks