1. This is the interest rate that banks charge on loans to their largest and most secure corporate borrowers. The Discount Rate The Fed-Funds Rate The Corporate Rate The Prime Rate
2. You wish to invest in a portfolio of stocks A (50%) and B (50%). The risk free rate is 4%. A B Expected return (%) 10 20 Beta 1.2 1.8 Correlation coefficient between returns 0.3 What’s the portfolio return?
3. Acme Magnets stock is selling for $100 today. It is expected that the company will pay a dividend of 5 dollars per share over the next year, and it will then be sold for $120 in exactly one year. What is the expected total return for the shareholders on this stock?