Given the following probability distribution, what are the expected return and the standard

deviation of returns for Security J?

State Pi rj

1 0.2 12%

2 0.3 4%

3 0.5 17%

Group of answer choices

12.10%; 5.93%

12.30%; 5.63%

12.40%; 5.63%

12.30%; 5.93%

12.10%; 5.63%

Suppose you hold a diversified portfolio consisting of a $6,485 invested equally

in each of 20 different common stocks. The portfolios beta is 0.81. Now

suppose you decided to sell one of your stocks that has a beta of 1.4 and to

use the proceeds to buy a replacement stock with a beta of 1.6. What would

the portfolios new beta be?

Group of answer choices

1.02

0.82

0.92

1.12

0.72

A stock has an expected return of 19.1 percent. The beta of the stock is 2.15 and the

risk-free rate is 2.9 percent. What is the market risk premium?

Group of answer choices

7.63%

7.53%

7.23%

7.33%

7.43%

Your portfolio consists of $31,232 invested in a stock that has a beta = 1.9,

$45,024 invested in a stock that has a beta = 1, and $93,754 invested in a

stock that has a beta = 1.8. The risk-free rate is 5%. Last year this portfolio had

a required return of 8.3%. This year nothing has changed except that the market

risk premium has increased by 3.8%. What is the portfolios current required rate

of return?

Group of answer choices

14.6%

14.3%

14.4%

14.7%

14.5%