None of the above 10. Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolio's beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35. What would the portfolio's new beta be? O a)1.29 Ob)1.23 O c) 1.17 O d) 1.36 None of the above want dividend vield or horsler's common stock is 31 percent. The 9. Given the following probability distribution, what are the expected return, the standard deviation and the coefficient of variation for Security i? State 1 Pi 0.2 0.6 0.2 rf 10% 15 20 2 3 O a) 14%; 3.16%; 0.1 b) 13%; 4.12%; 0.1 O c) 15%; 3.16%; 0.210 O d) 15%; 4.12%; 0.210 None of the above 10. Suppose you hold a portfolio consisting of a $10.000 investment in each of 8 8. Assume that you manage a $10 million mutual fund that has a beta of 1.05 and a 9.5% required return. The risk-free rate is 4.2%. You now receive another $5 million, which you invest in stocks with an average beta of 0.65. What is the required rate of return on the new portfolio?* O a) 8.83% O b) 8.45% C) 9.83% O d) 6.45% None of the above 0 Given the following probability distribution what are the expected return the 7. If an investor holds the following portfolio, what is the portfolio's beta? Stock Investment Beta A $50,000 B 50.000 c 50,000 D 50,000 Total $200.000 1.4 0.8 1 1.21 O a) 1.5 Ob) 1.1. c) 1.7 d) 1.3 None of the above None of the above 6. Life Inc's stock has an expected return of 13%, a beta of 1.25, and is in equilibrium. If the risk-free rate is 6%, what is the market risk premium? a) 5.6% b) 6.5% C) 5.8% d) 4.5% None of the above Ponsep 4. Assume that the risk-free rate is 5% and the expected return on the market is 12%. What is the required rate of return on stock with a beta of 0.8? a) 10.6% Ob) 14.6% O c) 12% O d) 9.6% None of the above 5. Samsung has $150,000 invested in a 2-stock portfolio. $65.000 is invested in Stock X and the remainder is invested in Stock Y. X's beta is 1.50 and Y's beta is 0.70. What is the portfolio's beta? O a) 1.2 Ob) 1.02 O c) 1.046 d) 1.46 None of the above 2. You are considering investing $1,000 in a complete portfolio. The complete portfolio is composed of Treasury bills that pay 5% and a risky portfolio, P. constructed with two risky securities, X and Y. The optimal weights of X and Y in P are 60% and 40%, respectively. X has an expected rate of return of 14%, and Y has an expected rate of return of 10%. To form a complete portfolio with an expected rate of return of 11%, you should invest of your complete portfolio in Treasury bills. * a) 19% b) 25% C) 36% d) 50% None of the above Choose the correct answer 1. A portfolio consists of two securities and the expected return on them is 11% and 15% respectively. What is the return on this portfolio if the first security constitutes of 45% of the total portfolio?* O a) 13% O b) 13.2% O c) 12.8% d) 12.2% None of the above Copy 2. You are considering investing $1.000 in a complete portfolio. The complete