Q1. State whether the following statement is True or False and explain why. The return on a risk-free asset and the return on any common stock are perfectly negatively correlated. (10 marks) Q2. Company X is expected to pay an end-of-year dividend of $5 a share. After the dividend its stock is expected to sell at $110. If the market capitalization rate is 8%, what is the current stock price? (10 marks) Q3. State whether the following statement is True or False and explain why. A bonds price is higher when its fixed rate of coupon is higher. (10 marks) Q4. Briefly explain the meaning of (beta) in finance and detail how it is calculated.