# Gb550 unit 3 quiz

Aug 11th, 2016
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1. Tom O'Brien has a 2-stock portfolio with a total value of \$100,000. \$37,500 is invested in Stock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What is his portfolio’s beta? (Points : 2) 1.17 1.23 1.29 1.35 Question 2. 2. Maxwell Inc.'s stock has a 50% chance of producing a 25% return, a 30% chance of producing a 10% return, and a 20% chance of producing a -28% return. What is the firm's expected rate of return? (Points : 2) 9.41% 9.65% 9.90% 10.15% Question 3. 3. Moerdyk Company's stock has a beta of 1.40, the risk-free rate is 4.25%, and the market risk premium is 5.50%. What is the firm's required rate of return? (Points : 2) 11.36% 11.65% 11.95% 12.25% Question 4. 4. Quigley Inc.'s bonds currently sell for \$1,080 and have a par value of \$1,000. They pay a \$100 annual coupon and have a 15-year maturity, but they can be called in 5 years at \$1,125. What is their yield to maturity (YTM)? 8.56% 9.01% 9.46% 9.93% Que

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Gb550 unit 3 quiz1. Tom O'Brien has a 2-stock portfolio with a total value of \$100,000. \$37,500 is invested inStock A with a beta of 0.75 and the remainder is invested in Stock B with a beta of 1.42. What ishis portfolios beta?(Points : 2)1.171.231.291.35Question 2. 2. Maxwell Inc.'s stock has a 50% chance of producing a 25% return, a 30% chanceof producing a 10% return, and a 20% chance of producing a -28% return. What is the firm'sexpected rate of return? (Points : 2)9.41%9.65%9.90%10.15%Question 3. 3. Moerdyk Company's stock has a beta of 1.40, the risk-free rate is 4.25%, and themarket risk premium is 5.50%. What is the firm's required rate of return?(Points : 2)11.36%11.65%11.95%12.25%Question 4. 4. Quigley Inc.'s bonds currently sell for \$1,080 and have a par value of \$1,000.They pay a \$100 annual coupon and have a 15-year maturity, but they can be called

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