16) Assume that you have $200,000 invested in a stock that is returning 11.50%, $300,000
invested in a stock that is returning 22.75%, and $500,000 invested in a stock that is returning
10.25%. What is the expected return of your portfolio?
A) 10.75%
B) 12.50%
C) 14.25%
D) 15.50%
17) Stock Z has an expected return of 6% with a standard deviation of 12%. If returns are
normally distributed, then approximately two-thirds of the time the return on stock Z will be
A) between 0% and 18%.
B) between 6% and 18%.
C) between -6% and 18%.
D) between 0% and 12%.
18) An investor currently holds the following portfolio:
Amount Invested
8,000 shares of Stock A
$16,000
Beta = 1.0
15,000 shares of Stock B
$48,000
Beta = 1.5
25,000 shares of Stock C
$96,000
Beta = 2.0
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If the risk-free rate of return is 2% and the market risk premium is 7%, then the required return
on the portfolio is
A) 14.25%
B) 14.75%
C) 15.25%
D) 15.75%