Answer all of these questions with the right question number next to the correct choice. ANSWER ALL OR NONE

1-Inflation, slow economic growth, and volatile interest rates are economic outcomes reflected in which of the following components of a security's return?

A)Systematic risk

B)Unsystematic risk

C)Diversifiable risk

D)Company-specific risk

2-What is an asset's expected rate of return if the current risk-free rate is 5%, the stock has a beta of 1.4, and the quoted market rate is 9%?

A)10.6%

B)5.6%

C)0.11%

D)0.05%

3-As investors become more confident about future economic prospects, the SML:

A)Shifts downward but remains parallel to the old SML

B)Shifts upward but remains parallel to the old SML

C)Rotates upward (counterclockwise) on its y intercept and becomes steeper

D)Rotates downward (clockwise) on its y intercept and becomes flatter

11-The T-bill rate is 0.9% and the market rate of return is 7.9%. What is the beta of a stock with a 13.7% rate of return?