The spot rates for the next three years are 8%, 9% and 11%. What is the implied forward rate for a two year bond to be dellevered in one year? Round to the nearest 0.5% O A 119 3. 154 OC. 13% O 0.125 O E 9.5% QUESTION 3 Stock X and Y have expected returns of 89 and 10% respectively. The standard deviation for stock X is 15% while stock Y has a standard deviation of 254. The risk free rate is 24. Calculate the Sharpe Ratio of an equally weighted portfolio of X and Y. A.0.32 O 30.4 O C 0.48 OD 0.55 O E Not enough information QUESTION 4 Which of the following statements are true? Short selling is generally riskier than buying stocks with your own money II. The interest rate on margin loans is the risk-free rate IL Short sellers hope companies go bankrupt OAT B. OC.IN D. I and I O El and I OF.Lll and in O G. ll and 7 QUESTION 5 If you diversify your portfolio more than you can expect. 1. A higher expected Sharpe Ratio II. To beat the market portfolio III. Higher portfolio returns than most individual stocks OA OBI OG ODI and it El and OF. Il and