Reference no: EM133071613
1. If the nominal 10-year Treasury yield is 2.52% and inflation is 1.94%, then what is the real rate? State your answer as a percentage with two decimal places and not in the decimal form itself (i.e. 13.21 not .1321).
2. Which type of return provides the best adjustment for cash inflows and outflows over a given holding period?
a. Time-weighted return
b. Money-weighted return
c. Arithmetic return
3. The risk-free rate is 1.2% and a stock's adjusted systematic risk exposure is 1.08. If the market risk premium is 6.97%, then what is the required return according to the Capital Asset Pricing Model? State your answer with two decimal places, and as a raw number, not as a percentage (i.e., 13.21, not .1321).
4. You will have a portfolio that is only comprised of two assets. You plan to allocate 43.5% into asset A, which has an expected return of 7.22%. The remainder of your portfolio will be allocated to asset B, which has an expected return of 11.13%. What is your expected return on this two-asset portfolio? State your answer with two decimal places and as a raw number, not as a percentage (i.e., 13.21, not .1321).
5. What is the main point of the efficient market hypothesis (EMH)?
a. New information can be predicted by following a reliable news source (i.e., MSNBC).
b. Stock prices quickly reflect new information.
c. Stock price movements can be predicted.
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: 1. If the nominal 10-year Treasury yield is 2.52% and inflation is 1.94%, then what is the real rate? State your answer as a percentage with two decimal places
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