1. Assume investment "X" has a standard deviation of 20%, investment "Y" has a standard deviation of 20%, and "X" and "Y" have a correlation of 0.5. If 50% is invested in "X" and 50% is invested in "Y" then which of the following is true?

A. The portfolio standard deviation will be greater than 20%.

B. The portfolio standard deviation will be equal to 20%

C. The portfolio standard deviation will be less than 20%

2. You have $20,000 invested in KTS which has a beta of 0.8 and $80,000 invested in CIS which has a beta of 1.4. What is the portfolio beta?

A. 1.28

B. 1.16

C. 1.10

D. 2.20

3. Assume that the risk-free rate is 2% and the expected return on the market is 10%. What is the required rate of return for a stock with a beta of 1.5?

A. 14%

B. 18%

C. 27%

D. 17%

4. Assume that the rate of a 10-year Treasury is 3% and the expected return on the S&P 500 is 11%. If a stock has a beta of 0.9, what is its required rate of return?

A. 12.6%

B. 7.2%

C. 14.0%

D. 10.2%

Answer rating: 100% (QA)

Answer Q1 Answer is C You can check it by using th... View the full answer