Please answering the following questions:

Question #$1$:

Your company's stock sells for $$150$ per share, its last dividend was $$3\mathrm{.}00$ per share, and its growth rate is $4\%.$ What is the stock's required rate of return?

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 $20\%?$

Options:

a$)2\mathrm{.}50$

b$)1\mathrm{.}25$

c$)2\mathrm{.}00$

d$)1\mathrm{.}65$

Question #$3$:

The expected return for investment A is $10\%,$ with a standard deviation of $1\mathrm{.}2\%.$ The expected return for investment B is $25\%,$ with a standard deviation of $3\%.$ Is B riskier than A$?$

NOTE: You need to provide two $(2)$ answers here! Answer "yes" or $"$no$"$ AND then show your work and explain your answer.

Question #$4$:

A company's $12-$month trailing earnings per share $[$EPS$]$ are $$4\mathrm{.}50,$ and is expected to grow $10\%$ annually. If an investor is willing to pay a P$/$E multiple that is no higher than $2\mathrm{.}5$ times its growth rate, and the stock is currently selling at $$100$ per share, would this be an acceptable purchase price? Explain and support your answer with numbers.

Question #$5$:

You are given the following information for a BSOPM $($Black Scholes Options Pricing Model$)$ problem.

Stock Price $=$ $$22$

Exercise Price $=$ $$24$

Days to Maturity $($Divided By Days in Year$)=120/365$

Risk Free Rate $=0\mathrm{.}08[$or $8\%]$

Standard Deviation $=0\mathrm{.}25$

Variance of Return $=0\mathrm{.}0625$

With this information and using the BSOPM, calculate the intrinsic value or theoretical price for the CALL OPTION CONTRACT.

Question #$6$:

In a related problem you were given the following information for a BSOPM $($Black Scholes Options Pricing Model$)$ problem.

Stock Price $=$ $$22$

Exercise Price $=$ $$24$

Days to Maturity $($Divided By Days in Year$)=120/365$

Risk Free Rate $=0\mathrm{.}08[$or $8\%]$

Standard Deviation $=0\mathrm{.}25$

Variance of Return $=0\mathrm{.}0625$

With this information and using the BSOPM, calculate the intrinsic value or theoretical price for the PUT OPTION CONTRACT.

Helpful Hint: Remember that with the BSOPM, the calculated theoretical price for the CALL OPTION $("$C$")$ is used as an input for calculating theoretical price for the PUT OPTION CONTRACT.

Question #$7$:

Calculate the Present Value of Growth Opportunities $($PVGO$)$ based on the following information: Earnings Per Share $=$ $$8\mathrm{.}00,$ Required Rate of Return $=14\%,$ Dividends Per Share $=$ $$1\mathrm{.}50,$ Return on Equity $=16\%.$

Question #$8$:

You own a bond portfolio and expect the market interest rate to increase for the foreseeable future. $($a$)$ What should you do with regards to the Duration of the portfolio and your own investment horizon? $($b$)$ What are the two reasons for doing so$?$

Note: To be eligible for full credit, you must answer BOTH $"$a$"$ and $"$b$."$

Question #$9$:

You own a bond portfolio and expect the market interest rate to decrease for the foreseeable future. $($a$)$ What should you do with regards to the Duration of the portfolio and your own investment horizon? $($b$)$ What are the two reasons for doing so$?$

Note: To be eligible for full credit, you must answer BOTH $"$a$"$ and $"$b$."$

Question #$10$:

Which of the following involves the asset allocation decision?

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 #$11$:

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

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 #$12$:

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:

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 #$13$;

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

Options:

True

False