## Transcribed Text

QUESTION 1
Suppose you are interested in the following two stocks:
Stock
Expected Return
Alpha
10%
Beta
6%
What is your expected portfolio return if you put 40% of you investment in Alpha, and 60% of your investment in Beta? (Show your work. Label %. Two decimal places required. Highlight or bold your answer.)
QUESTION 3
Return
Year
Stock A
Stock B
Stock C
1
15%
12%
5%
2
25%
14%
-6%
3
8%
9%
10%
4
16%
25%
1%
5
5%
3%
15%
Given the data above What is the standard deviation of returns for stock A? (Show your work. Label %. Two decimal places required. Highlight or bold your answer.) What is the variance of returns for stock B? (Show your
work. Label %. Three decimal places required. Highlight or bold your answer.) What is the average return of stock C? (Show your work. Label %. Two decimal places required. Highlight or bold your answer.)
What
is
the
average return of a portfolio that has 45% invested in stock A 35% invested in stock B, and the rest invested in stock C? (Show your work. Label %. Two decimal places required. Highlight or bold your answer.)
QUESTION 4
The expected possible outcomes for Roxy Stock are below. What is the expected return? (Show your work. Label %. Two decimal places required. Highlight or bold your answer.) What is the expected variance? (Show your
work. Label %. Two decimal places required. Highlight or bold your answer.) What is the expected standard deviation? (Show your work. Label %. Two decimal places required. Highlight or bold your answer.)
Outcome
Probability
Return
Recession
40%
-25%
Expansion
25%
20%
Boom
35%
45%
QUESTION 5
Security has a beta of 1.3. the risk-free rate is 4% and the expected return on the market is 11% What is the expected return for Security I? (Show your work. Label %. One decimal place required. Highlight or bold your answer.)
QUESTION 7
The following data is given:
Security
$ Invested
Beta
1
$9,000
0.7
2
$5,000
0.9
3
$8,000
1.2
What is the portfolio beta? (Show your work. Four decimal places required. Highlight or bold your answer.)
QUESTION 8
You bought a share of Bavarian Sausage stock for $46.50 at the beginning of the year. During the year the stock paid a $2.75 dividend and at the end of the year it trades at $52.75 What is the total return of your stock investment? (Show
your work. Label %. Two decimal places required. Highlight or bold your answer.) What is the total dollar return on your investment? (Show your work. Label $. Two decimal places required. Highlight or bold your answer.)
QUESTION 11
Security
$ Invested
Expected Return
1
$5,000
7%
2
$7,000
9%
3
$9,000
12%
Give the data above: What is the weight of Security 1? (Show your work. Label %. One decimal place required. Highlight or bold your answer.) What is the weight of Security 2? (Show your work. Label %. One decimal place
required. Highlight or bold your answer.) What is the weight of Security 3? (Show your work. Label %. One decimal place required. Highlight or bold your answer.) What is the expected return on the portfolio? (Show your
work. Label %. Two decimal places required. Highlight or bold your answer.)

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