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The following stock price information has been collected for QuickTrip (QT): END OF YEAR CLOSING PRICE 2016 $100.00 2017 $110.00 2018 $88.00 2019 $110.00 2020

The following stock price information has been collected for QuickTrip (QT):

END OF YEAR

CLOSING PRICE

2016

$100.00

2017

$110.00

2018

$88.00

2019

$110.00

2020

$132.00

QuickTrip has a correlation with the market portfolio of 0.60. The S&P 500 market portfolio has a standard deviation of 20%.

22. What is the arithmetic average return for QuickTrip over the sample period?

a.

6.25%

b.

8.75%

c.

9.38%

d.

11.25%

e.

15.00%

23. What is the standard deviation for QuickTrip over the sample period?

a.

20.16%

b.

22.50%

c.

23.49%

d.

26.89%

e.

27.99%

24. The investor looks at the current economy and determines that the risk-free rate is 2%, while the market portfolio risk premium is 6%. What is the required return to hold QuickTrip going forward?

a.

4.86%

b.

5.63%

c.

6.51%

d.

7.12%

e.

8.45%

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