Question
QUESTION 1 You are considering investing in a project with the following possible outcomes: Calculate the expected rate of return and standard deviation of returns
QUESTION 1
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You are considering investing in a project with the following possible outcomes: Calculate the expected rate of return and standard deviation of returns for this investment, respectively.
Probabilities: Boom:0.07 Normal:0.5 Decline:0.3 Depression:0.13
Returns: Boom:10% Normal:7% Decline:2% Depression:-11%
3.21%, 4.77%
2.98%, 6%
3.37%, 6.09%
7.43%, 5.65%
5 points
QUESTION 2
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A U.S. Treasury bill has a beta of _____ while the overall market has a beta of _____.
0; 0
0; 1
1; 0
1; 1
infinity; 1
5 points
QUESTION 3
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Which of the following must total to 100 percent? I. rates of return for the various economic states II. portfolio weights III. probabilities of occurrence for the various economic states IV. betas of the individual securities held within a portfolio
I and III only
II and IV only
II and III only
II, III, and IV only
I, II, III, and IV
5 points
QUESTION 4
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You own a portfolio that has 45% invested in asset A, and 55% invested in asset B. Asset A
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