Please answer the following questions: #$2,$ #$5,$ #$10,$ #$13,$ #$14,$ #$15,$ #$16,$ #$17,$ #$18,$ #$19,$ and #$20$

Question $2$:

What is the stock's Beta $(\backslash$beta $)$ if the average market return for the stock is $12\%,$ and the interest yield on $10-$year US Treasury Bonds is $4\%$ and the required or expected rate of return is $20\%?$

Question $2$ options:

a$)2\mathrm{.}50$

b$)1\mathrm{.}25$

c$)2\mathrm{.}00$

d$)1\mathrm{.}65$

Question $5$:

Given the following information, calculate the company's internal growth rate. Return on Equity $=21\%$; Dividend Payout Ratio $=15\%.$

Question $5$ options:

a$)15\mathrm{.}75\%$

b$)36\%$

c$)17\mathrm{.}85\%$

d$)19\mathrm{.}75\%$

Question $10$:

The Black Scholes Options Pricing Model $($BSOPM$)$ is an accurate framework for estimating equilibrium, or theoretically correct prices for Call and Put options contracts for which of the following reasons?

Helpful Hint: Select the MOST correct or MOST representative answer from the choices listed.

Here are the choices to select from.

Question $10$ options:

a$)$ Stock prices $[$and price changes$]$ are log$-$normally distributed.

b$)$ Natural logarithmic calculations are based on the use of base $"$e$"$ and since Black Scholes incorporates base $"$e$"$ into its framework, it is able to accurately estimate equilibrium or correct market prices.

c$)$ Black Scholes is a non$-$linear based model that is able to take into account a greater or more realistic range of possible outcomes.

d$)$ Stock prices $[$and price changes$]$ are log$-$normally distributed. Natural logarithmic calculations are based on the use of base $"$e$"$ and since Black Scholes incorporates base $"$e$"$ into its framework, it is able to accurately estimate equilibrium or theoretically correct market prices.

e$)$ Since the BSOPM is a transformation of the Simple Options Pricing Model, this statement is not entirely correct with regards to being more accurate in calculating theoretically correct prices.

Question $13$:

Which of the following involves the asset allocation decision?

Question $13$ options:

$1)$ What asset classes should be considered for investment?

$2)$ What policy weights should be assigned to each eligible asset class?

$3)$ What are the allowable allocation ranges based on policy weights?

$4)$ What specific securities or funds should be purchased for the portfolio?

Question $14$:

Which of the following decisions are involved with constructing an investment strategy?

Question $14$ options:

$1)$ What asset classes should be considered for investment?

$2)$ What policy weights should be assigned to each eligible asset class?

$3)$ What are the allowable allocation ranges based on policy weights?

$4)$ What specific securities or funds should be purchased for the portfolio?

Question $15$:

Using the Capital Asset Pricing Model $($CAPM$),$ the required rate of return for an individual stock is equal to which of the following:

HELPFUL HINT: The key to solving this question is to understand how mathematical terms, equations and$/$or functions are expressed verbally!

Select from the following:

Question $15$ options:

a$.$ Risk free rate plus the market risk premium plus the Beta coefficient.

b$.$ Risk free rate plus the market risk premium minus the beta coefficient.

c$.$ Risk free rate times the market risk premium plus the Beta coefficient.

d$.$ Risk free rate plus the market risk premium times the Beta coefficient.

e$.$ Risk free rate times the market risk premium minus the Beta coefficient.

Question $16$:

A stock is under$-$valued if its:

Question $16$ options:

a$.$ Market price exceeds its intrinsic value

b$.$ Market price is less than its intrinsic value

c$.$ Market price equals its intrinsic value

d$.$ Beta coefficient is less than $1\mathrm{.}00$

e$.$ Beta coefficient equals $1\mathrm{.}0$

Question $17$:

The APT $[$Arbitrage Pricing Theory$]$ model posits that the most significant factors influencing the required rate of return are:

Question $17$ options:

a$.$ Inflation and industrial$/$economic growth

b$.$ Inflation, industrial$/$economic growth and risk premiums

c$.$ Inflation, industrial$/$economic growth, risk premiums, risk free rate and a random error term

d$.$ Industrial$/$economic growth, risk premiums and a random error term

e$.$ Risk free rate, random error term, Beta coefficient and risk premiums

Question $18$:

When managing a bond portfolio, buy$-$and$-$hold investors strive to replicate or match the content of a particular bond index.

Question $18$ options:

True

False

Question $19$:

Active bond management strategies requires the manager to base portfolio construction, as well as buy$-$and$-$sell decisions by forming an outlook on expected trend in the term structure of interest rates, and make decisions accordingly.

Question $19$ options:

True

False

Question $20$:

Calculate duration for a bond based on the following: time to maturity $=7$ years, required rate of return $=8\mathrm{.}25\%$ and coupon rate $=3\mathrm{.}75\%.$

Question $20$ options:

$($a$)5\mathrm{.}164$

$($b$)5\mathrm{.}768$

$($c$)5\mathrm{.}984$

$($d$)6\mathrm{.}164$

$($e$)6\mathrm{.}262$

$($f$)6\mathrm{.}468$