Reference no: EM13837592

Problem 1: You own a portfolio invested 10.68% in Stock A, 17.67% in Stock B, 25.93% in Stock C, and the remainder in Stock D. The betas of these four stocks are 0.51, 1.29, 0.55, and 1.05. What is the portfolio beta?

Note: Enter your answer rounded off to two decimal points. For example, if your answer is 12.345 then enter as 12.35 in the answer box.

Problem 2: Calculate the expected returns of your portfolio

Stock	Invest	Exp Ret
A	$323	6.7%
B	$846	19.5%
C	$1,419	29.3%

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.

Problem 3: A portfolio is invested 44.1% in Stock A, 29.8% in Stock B, and the remainder in Stock C. The expected returns are 15%, 35.5%, and 24.7% respectively. What are the portfolios expected returns?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as 12.35 in the answer box.

Problem 4: 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.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

Problem 5: Suppose the real rate is 3.01% and the inflation rate is 3.88%. Solve for the nominal rate. Use the Fisher Effect formula.

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box. For example, if your answer is 0.12345 then enter as 12.35 in the answer box.

Problem 6: What is the beta of the following portfolio?

• 0.98
• 1.02
• 1.11
• 1.14
• 1.20

Problem 7: 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

Problem 8: What is the beta of the following portfolio?

• 1.08
• 1.14
• 1.17
• 1.21
• 1.23

Problem 9: 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

Problem 10: 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