• Which of the following portfolios will have the highest beta?A.Portfolio containing 50 percent U.S. Treasury bills and 50 percent U.S. government bonds
• B.Portfolio of U.S. government bonds
• C.Portfolio of U.S. Treasury bills
• D.Portfolio of U.S. common stocks
• Stock A has an expected return of 10 percent per year and stock B has an expected return of 20 percent. If 40 percent of a portfolio's funds are invested in stock A and the rest in stock B, what is the expected return on the portfolio of stock A and stock B?A.10 percent
• B.14 percent
• C.16 percent
• D.20 percent
• If the average annual rate of return for common stocks is 11.7 percent, and 4.0 percent for U.S. Treasury bills, what is the average market risk premium?A.15.7 percent
• B.4.0 percent
• C.7.7 percent
• D.11.7 percent
• E.Not enough information is provided
• Suppose the beta of Netflix is 2.2, the risk-free rate is 5.5 percent, and the market risk premium is 8 percent. Calculate the expected rate of return for Amazon.A.35.2 percent
• B.19.2 percent
• C.14.3 percent
• D.23.1 percent
• E.15.8 percent
• As the number of stocks in a portfolio is increased:A.unique (i.e., unsystematic) risk decreases and approaches zero
• B.market (i.e., systematic) risk decreases
• C.unique risk decreases and becomes equal to market risk
• D.total risk approaches zero