Reference no: EM13842554

Question 1: Suppose a stock had an initial price of $96.2 per share, paid a dividend of $6 per share during the year, and had an ending share price of $104.92. What are the percentage returns?

Question 2: You own a portfolio invested 27.92% in Stock A, 14.9% in Stock B, 29.85% in Stock C, and the remainder in Stock D. The beta of these four stocks are 1.31, 0.38, 0.23, and 1.47. What is the portfolio beta?

Question 3: Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%.

Compute the standard deviation of the returns.

Question 4: Suppose a stock had an initial price of $90.49 per share, paid a dividend of $7.9 per share during the year, and had an ending share price of $88.61. What are the dollar returns?

Question 5: Suppose a stock had an initial price of $83.75 per share, paid a dividend of $7.6 per share during the year, and had an ending share price of $102.35. What are the percentage returns if you own 25 shares?

Question 6: You own a portfolio invested 10.62% in Stock A, 11.3% in Stock B, 27.46% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.79, 0.66, 0.54, and 1.41. What is the portfolio beta?

Question 7: Calculate the expected returns of your portfolio

Stock	Invest	Exp Ret
A	$319	3.2%
B	$715	15.2%
C	$416	21.5%

Question 8: Based on the following information, calculate the expected returns:

	Prob	Return
Recession	30%	26.6%
Boom	70%	20.5%

Question 9: You have observed the following returns on ABC's stocks over the last five years:

3.5%, 9.4%, -5.1%, 13.2%, -4.4%

What is the arithmetic average returns on the stock over this five-year period.

Question 10: Calculate the expected returns of your portfolio

Stock	Invest	Exp Ret
A	$318	7.6%
B	$790	17.1%
C	$1,929	21.9%

Question 11: Suppose a stock had an initial price of $68.33 per share, paid a dividend of $9.8 per share during the year, and had an ending share price of $81.78. If you own 71 shares, what are the dollar returns?

Question 12: A portfolio is invested 26.6% in Stock A, 25% in Stock B, and the remainder in Stock C. The expected returns are 19%, 38.5%, and 22.3% respectively. What is the portfolio's expected returns?

Question 13: Suppose a stock had an initial price of $53.72 per share, paid a dividend of $7.7 per share during the year, and had an ending share price of $88.24. What are the percentage returns?

Question 14: You own a portfolio of two stocks, A and B. Stock A is valued at $6,540 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. What is the expected return on the portfolio if the portfolio value is $9,500?

• 9.58 percent
• 9.62 percent
• 9.74 percent
• 9.97 percent
• 10.23 percent

Question 15: What is the beta of the following portfolio?

• 1.08
• 1.14
• 1.17
• 1.21
• 1.23

Question 16: The stock of Billingsley United has a beta of 0.92. The market risk premium is 8.4 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?

• 8.87 percent
• 9.69 percent
• 10.93 percent
• 11.52 percent
• 12.01 percent

Question 17: You own a portfolio that has $1,900 invested in Stock A and $2,700 invested in Stock B. If the expected returns on these stocks are 9 percent and 15 percent, respectively, what is the expected return on the portfolio?

• 10.57 percent
• 11.14 percent
• 11.96 percent
• 12.52 percent
• 13.07 percent

Question 18: A $36,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 1.29 while the beta of stock B is 0.90. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is 0.58?

• $6,000
• $9,000
• $12,000
• $15,000
• $18,000

Question 19: What is the beta of the following portfolio?

• 0.98
• 1.02
• 1.11
• 1.14
• 1.20

Question 20: The systematic risk is same as:

• Unique risk
• Diversifiable risk
• Asset-specific risk
• Market risk
• Unsystematic risk

Question 21: Portfolio diversification eliminates which one of the following?

• Total investment risk
• Portfolio risk premium
• Market risk
• Unsystematic risk
• Reward for bearing risk

Question 22: Standard deviation measures _____ risk while beta measures _____ risk.

• systematic; unsystematic
• unsystematic; systematic
• total; unsystematic
• total; systematic
• asset-specific; market

Question 23: Semi-strong-form efficient markets are not weak-form efficient.

• True
• False

Question 24: If markets are efficient, the difference between the instrinsic value and the market value of the comapny's security is:

• positive
• negative
• zero

Question 25: Suppose the nominal rate is 10.01% and the inflation rate is 4.58%. Solve for the real rate. Use the Fisher Effect formula.