Based upon Exhibit $1,$ the expected three$-$year holding period return for Novo$-$Gemini

Inc. at the time of purchase was closest to:

A$.39\mathrm{.}76\%.$

B$.42\mathrm{.}76\%.$

C$.44\mathrm{.}82\%.$

Based upon Exhibit $1,$ the realized three$-$year holding period return for Novo$-$Gemini Inc.

was closest to:

A$.39\mathrm{.}76\%.$

B$.42\mathrm{.}76\%.$

C$.44\mathrm{.}82\%.$

Based on the historical record of surprises in inflation and productivity, the historical

equity risk premium for the US equity market, if it is used as an estimate of the for$-$

ward$-$looking equity risk premium, should most likely be:

A$.$ left unchanged.

B$.$ adjusted upward.

C$.$ adjusted downward.

Based on Exhibit $2,$ the forward$-$looking estimate for the US equity risk premium is closes

to:

A$.2\mathrm{.}2\%.$

B$.5\mathrm{.}8\%.$

C$.8\mathrm{.}2\%.$

Based on Exhibit $3,$ and assuming interest on debt is tax$-$deductible, the weighted averag

cost of capital $($WACC$)$ for Bezak, Inc. is closest to:

A$.10\mathrm{.}87\%.$

B$.11\mathrm{.}36\%.$

C$.13\mathrm{.}61\%.$

The estimate of beta for Twin Industries is closest to:

A$.0\mathrm{.}44$

B$.0\mathrm{.}85.$

C$.0\mathrm{.}89.$

A potential weakness of Johansson's approach to estimating the required return on equi

for Twin Industries is that the return estimate:

A$.$ does not include a size premium.

B$.$ may overstate potential returns over the long term.

C$.$ does not consider systematic risk arising from the economics of the industry.