QUESTION the Word och en wat is the memoho? MOGNO OL D MO ATION A wa WI B Shwe QUESTION QUESTION 18 The real risk-free rate of interest is 3% and the expected inflation rate is expected to be 1% next year and 2% for each of the next two years. If two-year Treasury notes yield 7.6%, what is the maturity risk premium on the two-year note? O 2.0.0210 O 6.0.0310 OG 0.0360 d. 0.0160 20 QUESTION 19 An analyst wants to use the Black-Scholes model to value call options on the stock of Heath Corporation based on the following data the price of the stock is $70, the strike price of the option is 568, the option matures in 6 months, the standard deviation of the stock's returns is 004, and the risk-free rate is 3%. Using the Black Scholes model, what is the value of the call option if at: 1.56937 QUESTION 20 20 pc You have a portfolio worth $10,000 consisting of 10 stocks with $1,000 invested in each. The portfolio's beta is 083 You plan to sel a stock with a beta of 0 61 and use the proceeds to buy a new stock with a beta of 18. The market return is 11% and the risk-free rate is 5% What rate of return should you expect on the new portfolio? 0.1809 b. 0.1069 OC 0.1544 d. 0.0927