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Risk and Return
Risk and Return
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1
Sam invested $30K in Potts stock & 70K in Stohs stock , Potts beta is 1.60 &stohs beta is 0.60 what is portfolio beta?
0.75
0.80
0.90
0.85
2
A stock has an expected return of 12.60%. Its beta is 1.49 &the risk-free rate is 5%. What is the market risk premium?
5.50%
5.35%
5.10%
5.75%
3
If risk-free rate is 6% & the market risk premium is 5%. Given this information, which of the statements is CORRECT?
If a stock has a negative beta, its required return must also be negative
An index fund with beta = 1 should have a required return less than 11%.
An index fund with beta = 1 should have a required return of 11%
An index fund with beta = 1 should have a required return greater than 11%
4
Stock has a beta of 1.40, risk-free rate is
4.25%, and the market risk premium is
5.50%. What is required rate of return
11.95%
13.95%
12.95%
12.50%
5
Tom invested $32 K in stock with beta 0.75& 68 K in stock with beta 1.38 &what is the portfolio beta?
1.18
1.25
1.35
1.30
6
Returns for Shields Company over the last 3 years as follows:- 21.50% ,(-12.50%),24% what is expected Rate of Return?
12%
11%
13%
10%
7
A stock has an expected return of 12.60%. Its beta is 1.49 & Risk-free rate is 5%. What is the market risk premium?
5.50
5.10%
5.80
5.75
8
XYZ stock has an expected return of 20% and a standard deviation of 25%. What is the coefficient of variation?
1.30
1.28
1.35
1.25
9
Vera stock has 1.40 beta & its RRR equal 12%. Dell stock has 0.80 beta. If RFR is 4.75% ,what is dell RRR?
8.50%
9.25%
9.50%
8.89%
10
Returns for Shields Company over the last 3 years as follows:- 21.50% ,(-12.50%),24% what is Standard Deviation(Sigma)?
22%
25%
15%
20%
11
Inflation, recession, and high interest rates are economic events that are best characterized as being
company-specific risk factors that can be diversified away.
irrelevant except to governmental authorities
Factors that are responsible for market risk
systematic risk factors that can be diversified away.
12
stock A has a 50% chance to make 35% return, 30% to make 10% return, & 20% chance to make(-28%),what is expected Return?
14.25%
15.25%
14.90%
14.50%
