Reference no: EM132482986

Question 1: The stock of Target Corporation has a return of 26.16. The market risk premium is 13.44 percent and the risk-free rate is 4.92 percent. What is the beta on this stock? Use the CAPM Equation

Note: Enter your answer rounded off to two decimal points.

Question 2: You purchased one share of Best Buy CO., Inc for $50.91 per share. The company paid a dividend of $5.23 per share during the year, and had an ending share price of $64.51. What is the dividend yield?

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.

Question 3: You purchased 243 shares of Best Buy CO., Inc for $61.16 per share. The company paid a dividend of $4.41 per share during the year, and had an ending share price of $44.26. What is the dollar return on your investment?

Note: Enter your answer rounded off to two decimal points. Do not enter $ or comma in the answer box. If your answer is negative, do include the negative sign.

Question 4: You own a portfolio that has $1,738 invested in Stock A and $1,822 invested in Stock B. If the returns on these stocks are 14.7% and 17.98%, respectively, what is the return on the portfolio?

Note: Enter your answer in percentages rounded off to two decimal points. Do not enter % in the answer box.

Question 5: When combining stocks in a portfolio, the greatest reduction in overall risk of the portfolio will occur when:

(choose only one answer)

Group of answer choices

1. the two stocks are negatively correlated.
2. the two stocks are positively correlated.
3. the two stocks are uncorrelated.

Question 6: One year ago, you purchased 14 shares of XYZ stock for $96 per share. During the year, you received dividend of $3 per share. Today, you sold all your shares for $107 per share. What is the percentage return on your investment?

Note: Round to the nearest 2 decimal percentage point. Do not enter % in the answer box. For example, if your answer is 12.345% then enter as "12.35" in the answer box.

Question 7: You own a two-asset portfolio, with 46% in Stock A and the remainder in Stock B. Stock A has a return of 16.01% and Stock B has a return of 17.35%. What is the portfolio return?

Convert your answer to percentage and round off to two decimal points. Do not enter % in the answer box.

Question 8: If a stock has a market beta less than 1, the expected return will be greater than expected return of market portfolio.

Group of answer choices

1. True
2. False

Question 9: The risk-free rate is 6.6%, the market risk premium is 12.7%, and the stock's beta is 2.06. What is the required rate of return on the stock, E(Ri)?

Use the CAPM equation.

Note: Enter your answer 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.

Question 10: Semi-strong-form efficient markets are not weak-form efficient.

Group of answer choices

True

False