What is the risk-free rate if the risk premium on the stock

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Reference no: EM132067063

1. There is a 30 percent probability that a particular stock will earn a 17 percent return and a 70 percent probability that it will earn 11 percent. What is the risk-free rate if the risk premium on the stock is 8.60 percent?

4.20 percent

4.80 percent

5.20 percent

5.40 percent

2. An investor holds a stock for one year. She then receives a dividend of $10 and sells the stock for $120. If her return was 16%, at what price did she buy the stock?

$103.45

$64.80

$139.20

$112.07

3. Stock A has an expected return of 15%; stock B has an expected return of 8%. What is the expected return on a portfolio is comprised of 60% of Stock A and 40% of Stock B?

12.2%

10.8%

9.1%

14.4%

4. What is the return to an investor who purchases a stock for $30, receives a $1.50 dividend at the end of the year, and then sells the share for $28.50?

10%

Reference no: EM132067063

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