1.Given fair pricing, the expected return equals the required return.

2.Greater complexity ensures greater explanatory power, therefore multifactor models are superior to single-factor models in estimating costs of capital.

3.Given fair pricing, the expected price appreciation return over an initial anticipated one-year holding period must be equal to the required return minus the dividend yield.

4.You performed a regression analysis using 60 months of data comparing return for your subject company to that of the S&P 500. The slope of the regression line is 0.4872. Use the Blume method to calculate an adjusted beta. (Enter your answer as a number with four decimal places, like this: 0.1234)