1. A money manager is holding the following portfolio: Stock Amounted Invested Return 1 $300,000 20% 2 $500,000 12% What is the return on this portfolio?
a) 15.00% b) 9.00% c) 8.75% d) 8.00%
2. The expected return on an asset is 6%. The risk-free rate is 5%, the return on the market is 10%, the asset has a beta of 1. You should
a) buy the asset now. b) sell the asset now. c) invest in CDs d) convert your stock into bonds