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Question 3 1 pts Lewis & Associates stock has an expected return of 10.2 percent, the risk-free rate is 4.5 percent, and the market risk-premium is 7.5 percent. What must be the beta of Lewis & Associates stock? O 0.76 O 0.30 O 1.90 O 0.45 O 1.36 Question 4 1 pts The risk-free rate is 3.3 percent and the expected return on Waystar Royco is 15.45%. What is the market-risk premium if Waystar's beta is 1.62? O 7.50 percent O 12.84 percent O 9.54 percent O 10.80 percent O 12.25 percentQuestion 5 1 pts Peaky Blinder Enterprises (PBE) has a beta of 1.46, the market risk-premium is 6.25 percent, and the risk-free rate is 2.80 percent. What is the expected return for PBE stock? O 9.13 percent O 7.84 percent O 16.06 percent 5.04 percent O 11.93 percentQuestion 6 1 pts Shiv Roy's portfolio consists of the following holdings. What is the beta of this portfolio? Stock Portfolio Weight Beta A 35% 0.84 B 25% 1.17 C 30% 1.11 D 10% 1.36 o 1.00 O 4.43 O 1.49 O 1.06 O 1.12 Question 7 1 pts Based on its current stock price, the consensus forecast return for the next year on Delos Inc. is 11.48%. The risk-free rate is 6.34%, the expected return on the market is 13.89%, and Delos' beta is 1.25. Is Delos stock correctly priced? O No, it is overpriced O No, it is underpriced O Need more information O Yes, it is correctly priced Question 8 1 pts Based on its current stock price, the consensus forecast return for the next year on Ray Donovan Security (RDS) is 8.29%. The risk-free rate is 5.76%, the expected market risk-premium is 9.73%, and RDS's beta is 0.22. Is RDS stock correctly priced? O Need more information Yes, it is correctly priced O No, it is underpriced O No, it is overpricedQuestion 9 1 pts A portfolio is riskier when the assets in the portfolio have: (Note: answers below are scrambled]I 0 More idiosyncratic risk 0 Larger variances 0 Larger covariances 0 More debt 0 More downside risk Question 10 1 pts Which of the following statements about Beta is true? (m: answers below are scrambled} I. Betas are about equally likely to be positive or negative ||. The average beta is about 1 III. The better diversied a portfolio is, the closer its beta is to 0 IV. The expected return on a stock with a beta of 2.0 should be twice the expected return of a stock with a beta of 1.0. 0 IV only 0 land IV 0 Hand IV 0 land Ill 0 || only 0 III and Iv Question 1 1 pts You have a $1,000 portfolio which is invested in stocks A and B plus a risk-free asset. $400 is invested in stock A. Stock A has a beta of 1.3 and stock B has a beta of .7. How much needs to be invested in stock B if you want a portfolio beta of .90? 0 $57 0 $482 0 $325 0 $275 0 $543 Question 2 1 pts Shelby Company has a beta of 1.05, the expected return on the market is 10 percent, and the risk- free rate is 3.8 percent. What is the expected return for Shelby stock? 0 14.3 percent 0 10.3 percent 0 6.5 percent 0 10.5 percent 0 20.3 percent
