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Paulson 27. You want to develop a portfolio containing U.S. Treasury bills and two stocks that is equally as is as the market. The securities
Paulson 27. You want to develop a portfolio containing U.S. Treasury bills and two stocks that is equally as is as the market. The securities will be equally welighed. If the beta of the first sockis 1.23, what does the bota of the second stock have to be? A. 0.77 B. 1.23 C. 0.23 D. 1.77 28. What should be the beta of a replacement stock if an investor wishes to achieve a portfolio beta of 1.2 by replacing stock in the following equally weighted portfolio stock A 1.0 beta, slock B - 1.5 beta; stock C = .5 beta? A. 0.7 B. 1.0 C. 1.2 D. 1.10 29. A project has an assigned beta of 1.24, the risk free rate is 3.8%, and the market risk premium is 9.2%. What is the project's expected rate of return? A. 15.21% B. 11.41% C. 10.50% D. 14.61% 30. A project has an assigned beta of 0.97, the market return is 10.1% the market risk premium is 8.1 What is the Risk Free Rate A. 7.88% B. 11.96% C. 2.00% D. 4.00%
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