Question 6 (3 points)

A Portfolio has 2 Assets (D, E). (D) = 40.00% of the Portfolio total value. The variance for (D) is 0.010 while for (E) the variance is 0.0225. If the correlation of (D, E) is 0.90, what is the Standard Deviation for this Portfolio?

Question 6 options:

	.1722
	.1272
	.0127
	.1972

Question 7 (1.5 points)

A Company has a Cost of Capital of 0.06254, and has decided to invest into a new project costing $100,000. It expects the total cash flow to be in year 1 = $50,250, year 2 = $31,545, year 3 = -$56,278, year 4 = $75,159 and the final year to be: -$42,064. Find the NPV of the project and decide if you should: Accept or Reject it.

Question 7 options:

	-$41,409.806, Accept
	-$43,773.835, Accept
	-$41,409.806, Reject
	-$43,773.835, Reject

Question 8 (1 point)

What is the Portfolio Beta if, 50.00% of your money is invested in the market portfolio (Toronto Stock Exchange), 40.00% in a preferred share Portfolio with its Beta of 1.50, and the remainder is invested in a risk-free asset (T-Bills)?

Question 8 options:

	0.50
	1.00
	1.10
	0.60

Question 9 (1.5 points)

The following returns of stock (Romeo) are from 2000 to 2006 namely; 8.0%, 8.0%, 10.0%, -7.0% (negative), 6.0%, 2.0%, and 11.0%. Find the Geometric average for stock (Romeo)?

Question 9 options:

	6.27517%
	6.23766%
	5.26376%
	5.46377%

Question 10 (2.5 points)

The States of the Economy are Boom: Probability is 10%, Normal: Probability is 50% and Recession: Probability is________? Stock (P) Returns are - Boom: Expected Return is 5%, Normal: Expected Return is 0.06 and Recession: 0.04. What is the Standard Deviation of the Stock?

Question 10 options:

	0.009433
	0.09433
	0.000089
	0.00089