You decide to invest in a portfolio consisting of 28 percent Stock A, 48 percent Stock B, and the remainder in Stock C. Based on the following information, what is the variance of your portfolio?

State of Economy	Probability of State Economy	Return if State Occurs
Stock A	Stock B	Stock C
Recession	.115	-10.20%	-3.60%	-12.60%
Normal	.667	9.50%	10.68%	17.00%
Boom	.218	21.57%	25.15%	29.85%

Multiple Choice

.01112

.00823

.00766

.00865

.00930

You need to have $30,500 in 7 years. You can earn an annual interest rate of 5 percent for the first 4 years, and 5.6 percent for the next 3 years. How much do you have to deposit today?

Multiple Choice

$19,206.44

$21,675.78

$20,063.76

$21,308.40

$20,828.23

Upton Umbrellas has a cost of equity of 10.9 percent, the YTM on the company's bonds is 5.6 percent, and the tax rate is 21 percent. The company's bonds sell for 94.1 percent of par. The debt has a book value of $390,000 and total assets have a book value of $946,000. If the market-to-book ratio is 2.56 times, what is the company's WACC?

Multiple Choice

8.91%

8.12%

9.57%

8.33%

5.75%