question 4

A security that has a rate of return that exceeds the Treasury bill rate but is less than the market rate of return must:

Select one:

a. be a risk-free asset with a beta less than .99.

b. be a risk-free asset.

c. be a risky asset with a beta less than 1.0.

d. have a beta that is greater than 1.0 but less than 2.0.

e. be a risky asset with a standard deviation less than 1.0.

question 2

The Johnson Company just paid an annual dividend of $1.60. How much would you be willing to pay for one share of Johnson Company stock if the dividend remains constant and you require a 10% rate of return?

Select one:

a. $14.40

b. $16.00

c. $19.38

d. $18.21

e. $17.78