Question 28

Jim Angel holds a $200,000 portfolio consisting of the following stocks:

Stock		Investment		Beta
A		$50,000		1.20
B		$50,000		0.80
C		$50,000		1.00
D		$50,000		1.20
Total		$200,000

What is the portfolio's beta? Do not round your intermediate calculations.

Group of answer choices

1.040

0.861

0.809

1.050

1.239

Question 29

Carson Inc.'s manager believes that economic conditions during the next year will be strong, normal, or weak, and she thinks that the firm's returns will have the probability distribution shown below. What's the standard deviation of the estimated returns? (Hint: Use the formula for the standard deviation of a population, not a sample.) Do not round your intermediate calculations.

Economic
Conditions		Prob.		Return
Strong		30%		40.0%
Normal		40%		10.0%
Weak		30%		-16.0%

Group of answer choices

17.59%

24.75%

22.58%

21.71%

25.18%

Question 30

Which of the following investments would have the highest future value at the end of 10 years? Assume that the effective annual rate for all investments is the same and is greater than zero.

Group of answer choices

Investment A pays $250 at the beginning of every year for the next 10 years (a total of 10 payments)

Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments)

Investment D pays $2,500 at the end of 10 years (just one payment)

Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments)