Question

10. Which of the following must total to 100 percent? I. rates of return for the various economic states II. portfolio weights Ⅲ. probabilities of occurrence for the various economic states IV. betas of the individual securities held within a portfolio A). I and III only B). II and IV only C). II and III only D). II, III, and IV only E). I, II, III, and I 11. Which of following statements is correct, everything else equal? A) B) C) D) A callable bond will have the higher coupon than a non-callable bond. A secured bond will have the higher coupon than a debenture. A senior bond will have the higher coupon than a subordinated debenture. A bond with a sinking fund will have the higher coupon than a bond without a sinking fund. None of them is correct. E) One year ago, you purchased 500 shares of stock for $12 a share. The stock pays S0.22 a share in dividends each 12. year. Today, you sold your shares for $28.30 a share. What are your total dollar return and percentage return on this investment? A. $6,222. 112.34% B. $7,432; 118.67% C. $8,150; D. $7,775 E. $8,260; 128.32% 145.68% 137.67% 13. Asset A has an expected return of 12% and a beta of 1.05. The risk-free rate is 4%. What is the market risk premium? A) 7.6% B) 8.2% C) D) 9.6% 10.2%