Estimate of company earnings per share

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1. You own a portfolio that has $1,500 invested in Stock A and $1,500 invested in Stock B. If the expected returns on these stocks are 15 percent and 10 percent, respectively, the expected return on the portfolio is ______ percent.

2. When the market's consensus estimate of a company's earnings per share (EPS) exceeds the actual company's EPS, A. There is a positive earnings surprise B. There is a negative earnings surprise C. The price of the stock is likely to increase D. A and C.

3. You own a portfolio equally invested in a risk-free asset and two stocks. If one of the stocks has a beta of 1.5 and the total portfolio is equally as risky as the market, the beta be for the other stock in your portfolio is_____.

Reference no: EM131875310

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