Please read carefully and keep your work covered at all times. 1. Circle answer B 2. Given stock Q's historical returns, what is the standard deviation? Year 1-30%; Year 2-15%; Year 3-10% Year 4-18%; Year 5 = 2%. a) 2.87% b) 7.01% c) 16.94% d) 11.18% e) 14,75% 3, There is a 20% chance we will get a 16% return, a 30% chance of getting a 14% return, a 40% chance of getting a 12% return, and a 10% chance of getting an 8% return, what is the expected rate of return? a) 13% b) 12% c) 3% d) 14% e) 15% 4. The standard deviation for the above investment would be: a) 2.56% b) 2.24% c) 2.87% d) 2.98% e) 5.00% 5. You purchase 800 shares of stock at $20 per share. One year later, the shares are selling for $23 per share. In addition, a dividend of $2 per share is paid at the end of the year. If you sell your stock at the end of the first year, what is the total percentage return for the investment a) 5% b) 15% c) 25% d) 10% e) 20% 6. An investment offers a total return of 12.4 percent over the coming year. You believe the total real return will be only 9.7 percent. What do you believe the exact inflation rate will be for the next year? a) 2.52 percent b) 2.67 percent c) 2.70 percent d) 2.46 percent e) 2.58 percent 7. A preferred stock issue paying a $2.00 per share annual dividend will be retired in three years at a price of $22.00. If the required rate of return is 8%, what's the value of one share? a $25.00 b) $17.46 c) $24.54 d) $22.23 e) $22.62