1. Portfolio Weights An investor owns $13,000 of Adobe Systems stock, $17,000 of Dow Chemical, and $27,000 of Office Depot. What are the portfolio weights of each stock?
Adobe System = 0.23, Dow Chemical = 0.30, Office Depot = 0.47
Adobe System = 0.30, Dow Chemical = 0.23, Office Depot = 0.47
Adobe System = 0.27, Dow Chemical = 0.33, Office Depot = 0.40
Adobe System = 0.33, Dow Chemical = 0.33, Office Depot = 0.33
2. CAPM Required Return A company has a beta of 1.13. If the market return is expected to be 11.8 percent and the risk-free rate is 3.90 percent, what is the company's required return?
17.23%
16.73%
13.33%
12.83%
3. Portfolio Beta You own $21,000 of City Steel stock that has a beta of 3.31. You also own $38,000 of Rent-N-Co (beta = 1.76) and $20,600 of Lincoln Corporation (beta = -.84). What is the beta of your portfolio?
4.23
4.89
1.50
1.00
4. Portfolio Return Year-to-date, Company O had earned a -7.7 percent return. During the same time period, Company V earned 9.95 percent and Company M earned 2.98 percent. If you have a portfolio made up of 35 percent Company O, 30 percent Company V, and 35 percent Company M, what is your portfolio return?
6.72%
1.33%
20.63%
5.23%
5. Average Return The past five monthly returns for PG Company are 1.35 percent, -1.7 percent, 4.35 percent, 3.8 percent, and 2.1 percent. What is the average monthly return?
2.67%
1.99%
13.33%
9.93%
6. Portfolio Return At the beginning of the month, you owned $7,000 of Company G, $9,500 of Company S, and $4,000 of Company N. The monthly returns for Company G, Company S, and Company N were 8.75 percent, -1.65 percent, and -.08 percent. What is your portfolio return?
7.02%
2.20%
2.34%
3.49%
7. Investment Return MedTech Corp stock was $50.95 per share at the end of last year. Since then, it paid a $0.45 per share dividend. The stock price is currently $62.50. If you owned 500 shares of MedTech, what was your percent return?
23.55%
8.83%
7.20%
19.20%
8. Portfolio Return Year-to-date, Company O had earned a -3.60 percent return. During the same time period, Company V earned 9.5 percent and Company M earned 7.75 percent. If you have a portfolio made up of 10 percent Company O, 20 percent Company V, and 70 percent Company M, what is your portfolio return?
20.85%
6.965%
7.685%
13.65%
9. Average Return The past five monthly returns for PG Company are 1.55 percent, -2.1 percent, 4.55 percent, 4.0 percent, and 2.3 percent. What is the average monthly return?
2.91%
10.33%
2.07%
14.53%
10. Required Return If the risk-free rate is 11.2 percent and the market risk premium is 6.4 percent, what is the required return for the market?
6.4%
4.8%
17.6%
11.2%