1. Your portfolio consists of 1,000 shares of stock A and 1,000 shares of stock B. At today's market open their respective prices per share are $7.50 and $21. What are their respective weights in the portfolio at today's market open prices? (rounded to two decimals).

   		They have equal weights
   		0.40 and 0.60
   		0.35 and 0.65
   		0.26 and 0.74.

1 points

QUESTION 32

1. What is your portfolio's beta if stock A's beta is 1.8 and that of B is 0.4.

   		0.76
   		1.10
   		1.00
   		0.9
   		0.86

Based on the CAPM what is the 1-year expected return on stock A, if the risk-free rate is 1% and the expected return on the market is 12%. ?

		9.76%
		12.23%
		20.8%
		18.14%
		30.10%

Given today's open price, what is the expected 1-year return on stock B, if it does not pay dividends, and if you expect that one-year hence the stock will sell for $23.0?

		9.96%
		8.11
		9.34
		9.52%
		10%.

1. Based on the CAPM, stock A is overpriced at today's market open.

   		TRUE
   		FALSE.

   Based on the CAPM stock B is overpriced at today's market open.

   		TRUE
   		FALSE.

   Based on the CAPM what should be the expected return on your portfolio?

   		12.89%
   		11.46%
   		8.99%
   		9.87%
   		9.36%