QUESTION 17

1. Maine Mining Company (MMC) and Washington Tech Company (WTC) operate in two separate industries and have a correlation coefficient of 0.0. If MMC's stock price increases by 8%, WTCs stock price is most likely expected to:

   		a. Increase by 8%.
   		b. Decrease by 8%.
   		c. Remain unchanged.
   		d. Change by an unknown amount.

QUESTION 18

1. Compute the expected market return for the Tiger Fund using Jensen's alpha and the capital asset pricing model, given the following information: Tiger Fund beta = 1.4, Tiger Fund 1-year return = 12%, Risk-free rate = 3%, Tiger Fund alpha = 0.7%

   		a. 6.43%.
   		b. 6.88%.
   		c. 7.62%.
   		d. 8.93%.