### Fin5080 Quiz 5

**Fin5080 Quiz 5**

**QUESTION 1**

Suppose a stock had an initial price of $82.77 per share, paid a dividend of $4.5 per share during the year, and had an ending share price of $95.61. If you own 386 shares, what are the dollar returns?

**QUESTION 2**

Calculate the expected returns of your portfolio

**QUESTION 3**

Suppose a stock had an initial price of $96.93 per share, paid a dividend of $5.4 per share during the year, and had an ending share price of $86.76. What are the dollar returns?
** **

**QUESTION 4**

Suppose the returns for Stock A for last six years was 4%, 7%, 8%, -2%, 9%, and 7%.

Compute the standard deviation of the returns.

** QUESTION 5**

Suppose a stock had an initial price of $70.2 per share, paid a dividend of $7.6 per share during the year, and had an ending share price of $109.5. What are the percentage returns?

**QUESTION 6**

You have observed the following returns on ABC's stocks over the last five years: 3.3%, 9.4%, 12.3%, 13.6%, 2.3% What is the geometric average returns on the stock over this five-year period.

** QUESTION 7**

Calculate the expected returns of your portfolio

**QUESTION 8**

Suppose a stock had an initial price of $97.93 per share, paid a dividend of $9.9 per share during the year, and had an ending share price of $106.26. What are the percentage returns?

** QUESTION 9**

Suppose a stock had an initial price of $74.52 per share, paid a dividend of $8.9 per share during the year, and had an ending share price of $105.78. What are the percentage returns if you own 25 shares?

**QUESTION 10**

You have observed the following returns on ABC's stocks over the last five years: 3%, 9%, -7.2%, 11.4%, -7.2%. What is the arithmetic average returns on the stock over this five-year period.

** QUESTION 11**

A portfolio is invested 26.6% in Stock A, 25% in Stock B, and the remainder in Stock C. The expected returns are 19%, 38.5%, and 22.3% respectively. What is the portfolio's expected returns?

** QUESTION 12**

You own a portfolio invested 27.37% in Stock A, 18.23% in Stock B, 29.75% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.8, 0.82, 0.37, and 1.17. What is the portfolio beta?

** QUESTION 13**

You have observed the following returns on ABC's stocks over the last five years: 4.2%, 8.4%, 9.3%, 10.5%, 6.7% What is the arithmetic average returns on the stock over this five-year period.

** QUESTION 14**

You own a portfolio invested 18.15% in Stock A, 17.77% in Stock B, 19.07% in Stock C, and the remainder in Stock D. The beta of these four stocks are 0.33, 1.25, 0.63, and 1.18. What is the portfolio beta?

** QUESTION 15**

You have observed the following returns on ABC's stocks over the last five years: 2.4%, 8%, -3.1%, 11.8%, -2.7% What is the geometric average returns on the stock over this five-year period.

** QUESTION 16**

Based on the following information, calculate the expected returns:

Prob Return

Recession 30% 43.5%

Boom 70% 20.1%

**QUESTION 17**

Portfolio diversification eliminates which one of the following?

**QUESTION 18**

Standard deviation measures _____ risk while beta measures _____ risk.

**QUESTION 19**

The systematic risk is same as:

**QUESTION 20**

You own a portfolio that has $1,900 invested in Stock A and $2,700 invested in Stock B. If the expected returns on these stocks are 9 percent and 15 percent, respectively, what is the expected return on the portfolio?

**QUESTION 21**

What is the beta of the following portfolio?

**QUESTION 22**

The stock of Billingsley United has a beta of 0.92. The market risk premium is 8.4 percent and the risk-free rate is 3.2 percent. What is the expected return on this stock?

**QUESTION 23**

What is the beta of the following portfolio?

**QUESTION 24**

You own a portfolio of two stocks, A and B. Stock A is valued at $6,540 and has an expected return of 11.2 percent. Stock B has an expected return of 8.1 percent. What is the expected return on the portfolio if the portfolio value is $9,500?

**QUESTION 25**

A $36,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is 1.29 while the beta of stock B is 0.90. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is 0.58?

**QUESTION 26**

Suppose the nominal rate is 14.17% and the inflation rate is 5.04%. Solve for the real rate. Use the Fisher Effect formula.

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**Fin5080 - Quiz 5**

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