Assume that a potential project has a 75% chance of doubling your investment in a year and a 25% chance of halving your investment in a year. What is the standard deviation of the rate of return on this investment?

		10.31%
		32.11%
		42.19%
		64.95%
		None of the above

The risk-free rate is 5%, and the expected market rate of return is 12%. A stock with a beta of 1.2 is selling for $20 and will pay a dividend of $1 at the end of the year. If the stock is expected to be priced at $22 at year-end, it is _______.

		fairly valued
		undervalued, buy it now
		undervalued, short it now
		overvalued, buy it now
		overvalued, short it now

Risk that CAN be eliminated through diversification is ______ risk. [I] Firm-specific [II] Idiosyncratic [III] Systematic [IV] Market

		I only
		II only
		I and II only
		I and III only
		II, III and IV only

Consider a single index model, the alpha of a stock is 2%, the beta is 1.1, and the market return is 12%. What is the idiosyncratic component of return given an actual return of 15%?

		0.2%
		0
		-0.2%
		-2%
		Not enough information

What is the risk measure associated with the Capital Market Line (CML)?

		Idiosyncratic risk
		Total risk
		Systematic risk
		Beta risk
		None of the above