Your portfolio has a beta of 1.2. The risk-free rate is 5%, and the market portfolio return is 15%. What happens to your portfolio's expected return if the portfolio's beta increases to 1.8, risk-free rate increases to 6%, but the market portfolio return decreases to 10%.

Multiple Choice

• It increases from 23% to 24%.

• It decreases from 24% to 23%.

• It increases from 13.2% to 17%.

• It decreases from 17% to 13.2%.

You want to construct a portfolio containing U.S. Treasury bills and two stocks. Its weight in T-bills is 24%, in Stock A is 36%, and in Stock B is 40%. If the beta of the Stock A is 1.20 and the beta of the portfolio is 0.95, what does the beta of Stock B have to be?

Multiple Choice

• 1.94

• 1.55

• 1.29

• 1.04

Suppose you play a game for 14 rounds. For each round, you have a probability of 33% to win $7, a probability of 37% to win $10, but also a probability of 30% to lose $15. What would be the total amount of gain you could earn?

Multiple Choice

• $16.91

• $25.37

• $21.14

• $31.71