Part $1.$ A stock has a beta of $1\mathrm{.}3$ and an expected return of $13\mathrm{.}2$ percent. A risk$-$free asset currently earns $1\mathrm{.}2$ percent. The beta of a portfolio comprised of these two assets is $$4.$ What percentage of the portfolio is invested in the stock?

A$.84\%$B$.87\%$C$.68\%$D$.72\%$E$.63\%$

Part $2..$ Arnold Belt and Bearing has identified two mutually exclusive projects. Project A has cash flows of $$40,000,$ $$21,200,$ $$16,800,$ and $$14,000$ for Years $0$ to $3,$ respectively. Project B has a cost of $$38,000$ and annual cash inflows of $$25,190$ for $2$ years. At what rate would you be indifferent between these two projects?

A$.-4\mathrm{.}38\%$B$.9\mathrm{.}41\%$C$.-1\mathrm{.}72\%$D$.6\mathrm{.}34\%$E $6\mathrm{.}34\%$

Part $3.$ Galindo recovery is considering an expansion with cash flows of $-$$$270,000,$ $$107,500,$ $$196,100,$ $$104,500,$ and $-$$$70,700$ for Years $0$ through $4,$ repectively. Should the firm proceed with the expansion based on the discounting approach to the modified internal rate of return if the discount rate is $13\mathrm{.}4$ percent? Why or why not?

A$.$ No the mirr is $14\mathrm{.}45\%$

B$.$ No the mirr is $9\mathrm{.}13\%$

C$.$ Yes the mirr is $14\mathrm{.}47\%$

D$.$ No the mirr is $11\mathrm{.}23\%$

E$.$ Yes the mirr is $9\mathrm{.}13\%$