If a stock's beta is 0.8 during a period when the market portfolio was down by 10%, then, a priori, we could expect the return on this individual stock to:

	lose more than 10%.
	lose, but less than 10%.
	gain more than 10%.
	gain, but less than 10%.

If you believe in CAPM and you find a stock that plots below the security market line then you believe that this stock:

	is underpriced
	is overpriced
	has positive alpha
	has zero systematic risk

What is a firm's weighted-average cost of capital if the stock has a beta of 1.45, Treasury bills yield 5%, and the market risk premium is 9%? In addition to equity, the firm finances 30% of its assets with debt that has a yield to maturity of 9%. The firm is in the 35% marginal tax bracket.

	12.66%
	10.30%
	9.31%
	14.39%

Which of the following statements is true for a project with $20,000 initial cost, cash inflows of $5,800 per year for six years, and a discount rate of 15%?

	Its payback period is roughly 3 1/2 years.
	Its NPV is $2,194.
	Its IRR is 10.85%.
	Its profitability index is 0.109.

Camp Fortune wants to buy a new chairlift for their hill. After their market research, they have narrowed things down to two possible chairlifts they are considering purchasing. Key information about these options are as follow. Chairlift A costs $695,000, last 7 years and provides an annual profit of $170,000. Chairlift B costs $1,215,000, last 15 years and provides an annual profit of $185,000. Assuming zero tax rate and a discount rate of 10%, which chairlift should Camp Fortune buy?

	Chairlift A because it has the highest EAA
	Chairlift B because it has the highest EAA
	The chairlift with the highest NPV
	The chairlift with the lowest EAA