Only need to ans the ABCD

1. Youre evaluating two stocks each on a stand-alone basis. Stock P has a Standard Deviation of 14.85 and a Coefficient of Variation of 8.2. Stock Q has a Standard Deviation of 32.57, and a Coefficient of Variation of 7.8. Theoretically, which is the safer of the two stocks, and by what reasoning?

Select one:

a. Q, because its Coefficient of Variation is lower

b. Q, because its Standard Deviation is higher

c. P, because its Coefficient of Variation is higher

d. P, because its Standard Deviation is lower

2. A stock has a Beta of 1.25. The Risk-Free Rate of Return is 3%, and the Return on the overall Market is 12%. What would be the risk-adjusted rate of return that you should expect this stock to yield?

Select one:

a. 11.50%

b. 14.25%

c. 9.00%

d. 12.00%

3. Economists are predicting with 40% certainty that the economy is probably going to boom, in which case the returns for EMC are predicted to be 12%. They feel that theres a 35% chance that the economy will remain in a normal pattern, in which case EMC will likely earn 8%. They think theres a 25% chance that the economy will weaken, and if so, they think EMC will earn 2%. If youre doing a stand-alone analysis of EMC, and their Expected Rate of Return is 8.1%, what is their approximate Standard Deviation (sigma)? Use my worksheet!

Select one:

a. 3.92%

b. 8.1%

c. 15.39%

d. 12.02%

4.The Dividend Yield is important to investors who prefer strong cash dividends from their investments. Today EXXONs price is $84.88. Their Earnings-per-share is $3.85 and their Dividend-per-share is $2.92. What is their Dividend Yield? Approximately:

Select one:

a. 4.54%

b. 6.77%

c. 7.98%

d. 3.44%

5.Read Corp. just paid a dividend on its common shares of $1.07. If the Market expects Reads dividends to grow at a constant rate of 2%, and it currently has a Required Rate of Return of 9%, at what approximate price should Reads stock now be trading, using the Gordon Model?

Select one:

a. $16.10

b. $15.59

c. $15.25

d. $14.50

6.What will a share of the $8 Preferred Stock of Hathaway Enterprises sell for if the Markets Required Rate of Return is 11%? Approximately:

Select one:

a. $80.00

b. $101.87

c. $72.73

d. $95.75