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QUESTION 39 Portfolio AB was created by investing in a conb nataon o Stocks A and B Stock A has a beta of 1.2 aid
QUESTION 39 Portfolio AB was created by investing in a conb nataon o Stocks A and B Stock A has a beta of 1.2 aid a standard de ation and a standard deaton of 18% wiach of the following statements is CORRECT? Of 25% Stock B has a beta of 1 4 and a standard deviation of20% Portfolio AB has a beta of 128 a. Portfolio AB has more money invested in Stock A than m Stock B o b. Stock A has more market risk than Stock B but less stand-alone risk c. Portfolio AB has nore money mvested in Stock B tan in Stock A o d. Stock A has more market risk than Poetfolio AB o e. Portfolio AB has the same anmount of money invested in each of the two stocks QUESTION 40 Gretta's portfolio consists of S70 statements is CORRECT? 000 mvested m a stock that has a beta of 1.5 and S300,000 unes ed m a stock that has a beta of08 The tisk fee i and the market n k prema nas 5% which ofthe following e 1 a. If the nsk-free rate reman s tucharged but the market risk premiun increases by 2% Gretta's portfo os requ red return will increase by more than 3% @ b. The prtfolios tequired return is less than 11% 0 c The required return on the market is 10% 0 d. If the market risk premiumremains unchanged but expected in ation increases by 2% Genas portfolios red ured ren n will increase by 2% e e. If the stock market is efficient, Gretta's portfolio's expected return should equal the expected retum on the market, whach is 11% QUESTION 41 n s the following stocks. The required rate ofreturn on the market is 10 00% and the risk free rate is 5 00% What rate of renndu d Joel Foster is the portfolio manager ofte SF Fun investors expect (and require) on thas fund? a S3 million hedge f nd that co Stock Amosnt Beta 1.20 0.50 1.40 D 500.000 0.75 A $1,075,000 675,000 750,000 $3,000,000 @ a. 12.12% b. 12 38% . 1009% () e, 13 67% Save Cliek Save and Submit to save and submit. Cliok Save All Annuers to save all anawers
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