Henry observes the expected return for Delta Company stock is -59 %. The market return and the risk free return are 10 % and 4 % , respectively. According to CAPM, the beta for Delta is closest to: a)+15 b) +2.0 c) +2.5 d)-1.5 A portfolio manager generates a 15.7 % return during the past year against a benchmark return of 13.3 %. A BHB attribution analysis shows that 100 basis points are generated from asset selection. The asset allocation contribution to performance is closest to: a) 14 % b) 1.9% c) 1.1 % d) 2.2% A financial advisor collects the following information that relates to a specific client: Risk-Free Rate of Interest 2.3% , Return Due to Client's Risk = 8.1 % , Diversified Return 0.7 % , and Total Portfolio Return 13.9 %. The Fama decomposition would assign a net selectivity value that is closest to: a) 2.8% b) 1.9% c) 1.2% d) 0.9 % Denise invested in the Marvelous mutual fund 5 years ago. Her returns were 10 % , 10 % , 10 % , 10 % and 10 % , respectively. Which of the following statements is corect regarding average returns? a) The standard deviation of returns is equal to zero. b) The geometric average equals the arithmetic average c) Neither a nor b d) Both a and b Foster is a young DPT and invests in the Bourgeois tech fund that has a beta of 2.0. If the expected market return is 11% and the risk-free rate of return is 4 % , what return should Foster expect from the Fund? a) 22% b) 18% c) 15 % d) 11% Dexter is investing $48,000 in Fund A and $32,000 in Fund B. Fund A and Fund B have betas of 1.4 and 1.1, respectively. Fund A has an R2 of .93, while Fund B has an R2 of 87. If the expected market return is 12 % and the risk-free rate of return is 3 %, what is the expected return for the portfolio using the CAPM. a) 12.00% b) 14.25% c) 14.52% d) 15.36 % A money manager generates a return of 11% when the benchmark returns 9 %. The manager's asset allocation decisions underperform by 50 basis points. Which is most accurate? a) The manager excelled in both asset allocation and security selection decisions. b) The manager outperforms the benchmark by 250 basis points. c) Security selection decisions outperform by 250 basis points d) Asset allocation decisions helped the manager outperform the benchmark