Question 8

The systematic risk is same as:

Unique risk

Diversifiable risk

Asset-specific risk

Market risk

Unsystematic risk

Question 10

Suppose the nominal rate is 13.3% and the inflation rate is 3.08%. 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.

Question 11

A portfolio is invested 20.5% in Stock A, 22% in Stock B, and the remainder in Stock C. The expected returns are 18.2%, 35%, and 24.5% 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.

Question 12

Suppose a stock had an initial price of $69.76 per share, paid a dividend of $8 per share during the year, and had an ending share price of $100.02. 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.

Question 13

You have observed the following returns on ABC’s stocks over the last five years:

2.1%, 9.6%, 9.5%, 13.9%, 8.6%

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.

Question 14

Suppose the real rate is 4.34% and the inflation rate is 5.31%. 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.

Question 15

Suppose a stock had an initial price of $76.77 per share, paid a dividend of $9.6 per share during the year, and had an ending share price of $101.8. 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.

Question 16

Calculate the expected returns of your portfolio

Stock Invest Exp Ret

A $490 3.1%

B $960 13%

C $262 24.6%

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.

Question 17

You have observed the following returns on ABC’s stocks over the last five years:

2.2%, 8.9%, 3.4%, 11.8%, 5.7%

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.

Question 18

Calculate the expected returns of your portfolio

Stock Invest Exp Ret

A $349 8%

B $856 19.6%

C $1,367 27.8%

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.

Question 19

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.

Question 20

Suppose a stock had an initial price of $70.89 per share, paid a dividend of $9.6 per share during the year, and had an ending share price of $91.09. If you own 339 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.

Question 21

Suppose the real rate is 4.82% and the nominal rate is 12.74%. 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.

Question 22

Suppose a stock had an initial price of $93.2 per share, paid a dividend of $5.6 per share during the year, and had an ending share price of $106.03. 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.

Question 23

Based on the following information, calculate the expected returns:

Prob Return

Recession 30% 26.9%

Boom 70% 3.8%

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.

Question 24

You own a portfolio invested 10.01% in Stock A, 12.65% in Stock B, 13.78% in Stock C, and the remainder in Stock D. The beta of these four stocks are 1.14, 1.15, 0.99, and 0.73. 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.

Question 25

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.

Question 26

Suppose a stock had an initial price of $81 per share, paid a dividend of $4.1 per share during the year, and had an ending share price of $100.57. 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.

Question 27

You own a portfolio invested 10.68% in Stock A, 17.67% in Stock B, 25.93% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.51, 1.29, 0.55, and 1.05. 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.

Question 28

You have observed the following returns on ABC’s stocks over the last five years:

4.1%, 9.9%, -6.7%, 10.3%, -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