Only questions 9 till 12

State 1 2 Probability 0.20 0.15 0.40 0.10 0.15 Return on Stock A 5.0% 7.0% -8.0% 6.0% 9.0% Return on Stock B 8.0% 5.0% 9.0% -15.0% 6.0% 3 4 5 Question 7 The expected rates of return of stocks A and B are closest to and , respectively. A B D 5.00%: 8.00% -8.0%; 9.00% 8.00%; 4.00% 0.8%; 5.35% Question 8 The variances of stocks A and B are closest to and respectively. A B D 0.37%; 0.79% 0.46%; 0.87% 0.53%; 0.48% 7.28%; 6.94% Question 9 The coefficient of correlation between A and B is closest to A B D E 0. -0.03. -0.31. -0.41. -0.57 Question 10 If you invest 80% of your money in A and 20% in B, what would be your portfolio's expected rate of return and standard deviation? B D E 3.56%; 5.99% 3.56%; 0.29% 1.71%; 5.41% 1.71%; 7.22% None of the options 6 Question 11 The expected rate of retum and standard deviation of the global minimum variance portfolio, GMV, are closest to and , respectively A B D E 3.00%; 3.88% 4.97%; 4.03% 3.15%; 3.86% 5.57%; 4.40% 4.59%; 5.14% Question 12 Which of the following portfolio(s) is (are) on the efficient frontier? I The portfolio with 60 percent in A and 40 percent in B. II The portfolio with 50 percent in A and 50 percent in B. III The portfolio with 40 percent in A and 60 percent in B. IV The portfolio with 30 percent in A and 70 percent in B. A Only I. B Only IV. C I and II. DIII and IV. E I, II, III, and IV