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The market portfolio of common stocks earned 14.7% in one year. Treasury bills earned 5.7%. What was the real risk premium on equities? A) 12.2%

The market portfolio of common stocks earned 14.7% in one year. Treasury bills earned 5.7%. What was the real risk premium on equities? A) 12.2% B) 9.0% C) 6.5% D) 18.7% E) 5.0% Part 2: You own the following portfolio of stocks. What is the portfolio weight of stock C? Stock Number of Shares Price per Share A 100 $22 B 600 $16 C 400 $40 D 210 $33 A) 39.74 B) 56.07 C) 46.07 D) 30.31 E) 51.07 Part 3: The expected return on JK stock is 13.60 percent while the expected return on the market is 11.0 percent. The beta of JK stock is 1.4. What is the risk-free rate of return? A) 4.00 percent B) 4.50 percent C) 4.90 percent D) 3.40 percent E) 3.10 percent

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