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82.
Your portfolio has a beta of 1.12. The portfolio consists of 40 percent U.S.
Treasury bills, 30 percent stock A, and 30 percent stock B. Stock A has a
risk-level equivalent to that of the overall market. What is the beta of stock
B?
83.
You would like to combine a risky stock with a beta of 1.68 with U.S.
Treasury bills in such a way that the risk level of the portfolio is equivalent
to the risk level of the overall market. What percentage of the portfolio
should be invested in the risky stock?
84.
The market has an expected rate of return of 11.2 percent. The long-term
government bond is expected to yield 5.8 percent and the U.S. Treasury bill
is expected to yield 3.9 percent. The inflation rate is 3.6 percent. What is the
market risk premium?
85.
The risk-free rate of return is 3.9 percent and the market risk premium is
6.2 percent. What is the expected rate of return on a stock with a beta of
1.21?
86.
The common stock of Jensen Shipping has an expected return of 14.7
percent. The return on the market is 10.8 percent and the risk-free rate of
return is 3.8 percent. What is the beta of this stock?
87.
The common stock of United Industries has a beta of 1.34 and an expected
return of 14.29 percent. The risk-free rate of return is 3.7 percent. What is
the expected market risk premium?
88.
The expected return on JK stock is 15.78 percent while the expected return
on the market is 11.34 percent. The stock's beta is 1.51. What is the risk-
free rate of return?
89.
Thayer Farms stock has a beta of 1.12. The risk-free rate of return is 4.34
percent and the market risk premium is 7.92 percent. What is the expected
rate of return on this stock?
90.
The common stock of Alpha Manufacturers has a beta of 1.14 and an actual
expected return of 15.26 percent. The risk-free rate of return is 4.3 percent
and the market rate of return is 12.01 percent. Which one of the following
statements is true given this information?
91.
Which one of the following stocks is correctly priced if the risk-free rate of
return is 3.7 percent and the market risk premium is 8.8 percent?
92.
Which one of the following stocks is correctly priced if the risk-free rate of
return is 3.2 percent and the market rate of return is 11.76 percent?
93.
You own a portfolio that has $2,000 invested in Stock A and $3,500 invested
in Stock B. The expected returns on these stocks are 14 percent and 9
percent, respectively. What is the expected return on the portfolio?
94.
You have $10,000 to invest in a stock portfolio. Your choices are Stock X
with an expected return of 13 percent and Stock Y with an expected return
of 8 percent. Your goal is to create a portfolio with an expected return of
12.4 percent. All money must be invested. How much will you invest in stock
X?
95.
What is the expected return and standard deviation for the following stock?
