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Managerial Finance Quiz 3

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Question;Question 1;1.;A $36,000 portfolio is invested in a risk-free security and two;stocks. The beta of stock A is 1.29 while the beta of stock B is 0.90. One-half;of the portfolio is invested in the risk-free security. How much is invested in;stock A if the beta of the portfolio is 0.58?;$6,000;$9,000;$12,000;$15,000;$18,000;1 points;Question 2;1.;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;1 points;Question 3;1.;Standard deviation measures _____ risk while beta measures;risk.;systematic;unsystematic;unsystematic;systematic;total, unsystematic;total, systematic;asset-specific;market;1 points;Question 4;1.;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;1 points;Question 5;1.;Portfolio diversification eliminates which one of the following?;Total investment;risk;Portfolio risk;premium;Market risk;Unsystematic risk;Reward for bearing;risk;1 points;Question 6;1.;What is the beta of the following portfolio?;1.08;1.14;1.17;1.21;1.23;1 points;Question 7;1.;What is the beta of the following portfolio?;0.98;1.02;1.11;1.14;1.20;1 points;Question 8;1.;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;1 points;Question 9;1.;The systematic risk is same as;Unique risk;Diversifiable risk;Asset-specific risk;Market risk;Unsystematic risk;1 points;Question 10;1.;Suppose a stock had an initial price of $99.26 per share, paid a;dividend of $5.8 per share during the year, and had an ending share price of;$98.58. If you own 337 shares, what are the dollar returns?;Note: Enter your answer;rounded off to two decimal points. Do not enter $ or comma in the answer;box. For example, if your answer is $12.345 then enter as 12.35 in the;answer box.;1 points;Question 11;1.;You have observed the following returns on ABC's stocks over the;last five years;3.6%, 9.1%, -10.1%;13%, -7.6%;What is;the arithmetic average returns on the stock over this five-year period.;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.;1 points;Question 12;1.;A portfolio is invested 33.6% in Stock A, 23.5% in Stock B, and;the remainder in Stock C. The expected returns are 14.3%, 35.2%, and 13%;respectively. What is the portfolio's 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.;1 points;Question 13;1.;Suppose a stock had an initial price of $76.24 per share, paid a;dividend of $9.8 per share during the year, and had an ending share price of;$107.22. What are the percentage 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.;1 points;Question 14;1.;You have observed the following returns on ABC's stocks over the;last five years;3.8%, 9.9%, 10.1%;11.9%, 3.2%;What is;the geometric average returns on the stock over this five-year period.;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.;1 points;Question 15;1.;You own a portfolio invested 17.94% in Stock A, 10.6% in Stock B;13.95% in Stock C, and the remainder in Stock D. The beta of these four stocks;are 1.07, 0.93, 0.21, and 1.45. 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.;1 points;Question 16;1.;Suppose the nominal rate is 10.78% and the inflation rate is;4.66%. Solve for the real rate.;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.;1 points;Question 17;1.;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.;1 points;Question 18;1.;You own a portfolio invested 21.05% in Stock A, 17.02% in Stock B;23.1% in Stock C, and the remainder in Stock D. The beta of these four stocks;are 0.97, 0.25, 0.61, and 0.78. 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.;1 points;Question 19;1.;Suppose the real rate is 5.5% and the nominal rate is 12.62%.;Solve for the inflation rate.;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.;1 points;Question 20;1.;Suppose a stock had an initial price of $51.82 per share, paid a;dividend of $5 per share during the year, and had an ending share price of;$87.91. What are the percentage 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.;1 points;Question 21;1.;Calculate the expected returns of your portfolio;Stock;Invest;Exp;Ret;A;$258;4%;B;$963;13.4%;C;$380;25.2%;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.;1 points;Question 22;1.;Suppose a stock had an initial price of $94.3 per share, paid a;dividend of $5.9 per share during the year, and had an ending share price of;$97.79. What are the percentage returns if you own 25 shares?;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.;1 points;Question 23;1.;Suppose the real rate is 3.68% and the inflation rate is 6.89%.;Solve for the nominal rate.;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.;1 points;Question 24;1.;You have observed the following returns on ABC's stocks over the;last five years;2.7%, 8.3%, 12.7%;11.2%, 2.1%;What is;the arithmetic average returns on the stock over this five-year period.;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.;1 points;Question 25;1.;Calculate the expected returns of your portfolio;Stock;Invest;Exp;Ret;A;$181;9%;B;$937;13.8%;C;$1,227;21.8%;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.;1 points;Question 26;1.;Suppose a stock had an initial price of $89.33 per share, paid a;dividend of $5.4 per share during the year, and had an ending share price of;$88.95. What are the dollar returns?;Note: Enter your answer;rounded off to two decimal points. Do not enter $ or comma in the answer;box. For example, if your answer is $12.345 then enter as 12.35 in the;answer box.;1 points;Question 27;1.;Based on the following information, calculate the expected;returns;Prob;Return;Recession;30%;7.3%;Boom;70%;14.7%;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.;1 points;Question 28;1.;You have observed the following returns on ABC's stocks over the;last five years;4.3%, 9.7%, -8.3%;10.4%, -2.5%;What is;the geometric average returns on the stock over this five-year period.;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.

 

Paper#49086 | Written in 18-Jul-2015

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