QUESTION 1

Which of he following best describes our use of HPR in our stock valuation? A. HPR is the guaranteed return on the stock. B. HPR is our best guess of the market's required return on the stock given its current price. C. HPR is the historical return on the stock D. HPR is the fair return on the stock

QUESTION 2

Practitioners typically use which of the following for their risk-free rate?

	A.	current 10-year Treasury Bond Yields
	B.	historical average of10-Year Treasury bond yields
	C.	Historical average of 3-month T-bill yield
	D.	current 3-monthT-bill yield

QUESTION 4

The expected market risk premium is difficult to predict,but theoretically we know that it depends on:

	A.	the market's level of risk aversion and volatility
	B.	the market's perception of future prospects
	C.	the amount of investors in the market
	D.	the market's level of greed and fear

QUESTION 5

Which of the following is NOT a reason why two different sources may have different beta values?

	A.	The market proxy that was used for calculation may have been the S&P500instead of the Nasdaq
	B.	Weekly returns may have been used instead of monthly returns
	C.	Beta is a measure of risk.
	D.	2 years of data may have been used to calculatebetainstead of 5years.

QUESTION 6

If the risk-free rate increases, what will happen to the stock's holding period return?

	A.	It will not change.
	B.	It will decrease.
	C.	It will increase.