BD Lamps is expected to pay a dividend of BDT 2 in the upcoming year. The risk-free rate of return is 4% and the expected return on the market portfolio is 14%. Analysts expect the price of BD Lamps shares to be BDT 22 a year from now. The beta of BD Lamps' stock is 1.25. The market's required rate of return on BD Lamps' stock is

16.5%

14.0%

17.5%

15.25%

A statistic(s) that measures how the returns of two risky assets move together is

both covariance and correlation.

covariance.

correlation.

variance.

standard deviation.

Rational investors want efficient portfolios. According to Markowitz, why are these portfolios optimal?

transactions costs.

expected return and risk.

expected return

risk.

Berger Paints is expected to pay a dividend of BDT 1.00 in the upcoming year. Dividends are expected to grow at the rate of 6% per year. The risk-free rate of return is 5% and the expected return on the market portfolio is 13%. The stock of Berger Paints has a beta of 1.2. What is the intrinsic value of Berger Paints?

BDT 14.29

BDT 12.33

BDT 11.62

BDT 14.60

If markets are truly efficient and in equilibrium

any security that lies above the SML would be considered overvalued.

no security would lie on the SML.

any security that plots below the SML would be considered undervalued.

all securities would lie on the SML.

In a well diversified portfolio

unsystematic risk is negligible.

nondiversifiable risk is negligible.

risk does not exist.

market risk is negligible.

systematic risk is negligible.

Weak-form EMH states that

Successive price changes are independent.

Successive price changes are dependent.

Properly specified trading rules are of value.

Successive price changes are biased.

Successive price changes depend on trading volume.

What is the estimated value of IDLC stock with a required rate of return of 15%, a projected constant growth rate of dividends of 10% and expected dividend of BDT 2?

BDT 4

BDT 44

BDT 20

BDT 40

Beximco currently earns BDT 3 per share and currently pays BDT 1.20 per share in dividends. It is expected to have a constant growth rate of 7% per year. The required rate of return is 14%. What is the intrinsic value of this stock?

BDT 40.05

BDT 18.34

BDT 17.14

BDT 42.86

A requirement for a market to be efficient is a large number of profit-maximizing investors.

True

False

A security that plots above the SML would be a good security to sell short.

True

False

no need to explain. just give me answer