v Savea Question o (4 points) If the risk-free rate is 5.0%, the expected return on the market is 16.0%, and the expected return on Security J is 16.9%, what is the beta for Security J? 0.74 1.08 1.32 0.66 0.93 8 Question 7 (4 points) What is the expected return for the following stock? (State your answer in percent with one decimal place.) 21 Outcomes Possible returns Probability better 368 13 24 same 258 398 Worse 18& 48% 20.37% 23.07% 24.98% 26.42% Question& (4 points) You are holding a stock that has a beta of 1.86 and is currently in equilibrium. The required return on the stock is 13.01%, and the return on the market portfolio is 10.20%.What would be the new required return on the stock if the return on the market increased to 14.00% while the risk-free rate and beta remained unchanged? 15.99% 12 32.97% 13.01% 15 27.54% 20.08% 18 Question 9 (4 points) You are holding a stock that has a beta of 1.77 and is currently in equilibrium. The required return on the stock is 15.8 1% and the return on a risk-free asset is 5.0 %. What would be the return on the stock if the stock's beta increased to 2.18 while 4 the risk-free rate and market return remained unchanged? 29.22% 18.32% 15.81% 24.63% 21 What is the expected return for the following port folio? (State your answer in percent with two decimal places.) Stock Expected returns Investment AAA 37% $400,000 -- BBB 26% $1,300,000 cCC 12% $1, 300,000 12 DDD 6 $1,400,000 20.31% 15 14.57% )17.87% 18 18.89% 20 16.50% Question 11 (4 points) 24 23 If the risk-free rate is 6.0%, the market risk premium is 9.0 %, and the expected return on Security J is 29.2%, what is the beta for Security J? 9.44 7.74 2.58 20 221 The risk-free return is 3.3% and the market return is 15.3%. What is the expected return 6 for the fo1lowing portfolio? (State your answer in percent with two decimal places.) Stock Beta Investment AAA 3.7 $700,000 BBB 2.8 $1,000,000 cCc 1.9 $2,900,000 12 DDD 1.1 $2,000,000 23.82% 15 27.12% 33.67% 17 18 30.37% 19.85% 20 Question 13 (4 points) 23 24 If you wish to accumulate $246,000 in 17 years, how much must you deposit today in an account that pays an annual interest rate of 15%? $18,287.81 $22,859.77 $30,403.49 $25.877 26