QUESTION 15 Choose the correct answer Tropical strom Nicole hit Jacksonville A. Idiosyncratic risk Rising inflation B. Systematic risk Recession Rising interest rates QUESTION 16 Firm XYZ's required return is 16%, and the price of the stock is $80 per share. D0=$3. Dividend will grow by 20% for the next four years. After the fourth year, the dividend will grow at the rate of g forever. Find g. (Hint: D4=$3.00(1.20)4. And then you can pick A, B, C, or D, and try.) 10.34%10.24%10.71%10.15% QUESTION 17 Stock A has an expected return of 11% and a standard deviation of 25%. Stock B has an expected return of 16% and a standard deviation of 20%. Assume that risk free rate is 6% and the market risk premium, rMr RF =8%. Portfolio AB: 50% invested in Stock A; 50% invested in Stock B. The correlation between stock A and B is 0. Choose the correct answer. Beta of stock A=0.93 Portfolio of AB is riskless, because the two stocks are not correlated. Stock B's beta is 1.25. Portfolio AB's return is 14.34%