1. Jim Angel holds a $200,000 portfolio consisting of the following stocks: Stock Investment Beta A $50,000 1.20 B $50,000 0.80 C $50,000 1.00 D $50,000 1.20 Total $200,000 What is the portfolio's beta? Do not round your intermediate calculations.
a. 0.861 b. 0.809 c. 1.050 d. 1.239 e. 1.040
2. Molen Inc. has an outstanding issue of perpetual preferred stock with an annual dividend of $2.00 per share. If the required return on this preferred stock is 6.5%, at what price should the stock sell?
a. $32.92
b. $30.77
c. $23.38
d. $27.38
e. $38.15
3. Wendy purchased 800 shares of Genetics Stock at $3 per share on 1/1/15. Wendy sold the shares on 12/31/15 for $3.45. Genetics stock has a beta of 1.9, the risk-free rate of return is 4%, and the market risk premium is 9%. Wendy's holding period return is
a. 15.0%.
b. 16.5%.
c. 17.6%.
d. 21.1%.