9. Given the following probability distribution, what are the expected return, the standard deviation and the coefficient of variation for Security i? *

a) 14%; 3.16%; 0.1

b) 13%; 4.12%; 0.1

c) 15%; 3.16%; 0.210

d) 15%; 4.12%; 0.210

None of the above

10. Suppose you hold a portfolio consisting of a $10,000 investment in each of 8 different common stocks. The portfolios beta is 1.25. Now suppose you decided to sell one of your stocks that has a beta of 1.00 and to use the proceeds to buy a replacement stock with a beta of 1.35. What would the portfolios new beta be? *

a)1.29

b)1.23

c) 1.17

d) 1.36

None of the above

11. The current dividend yield on Chrysler's common stock is 3.1 percent. The company just paid a $1.68 annual dividend and announced plans to pay $1.78 next year. The dividend growth rate is expected to remain constant at the current level. What is the required rate of return on this stock? *

a) 8.42%

b) 9.05%

c) 8.72%

d) 10.15%

None of the above

12. How much are you willing to pay for one share of Levine stock if the company just paid a $1.5 annual dividend, the dividends increase by 3% annually, and you require a 15% rate of return? *

a) $12.5

b) $10

c) $12.88

d) $13

None of the above

State Pi 0.2 rf 10% 1 0.6 15 2 3 0.2 20