1. The expected rate of return of an investment/stock can be constructed by developing a ___ of all the possible returns/outcomes. This is done by multiplying each stock’s individual return/outcome under a given/assumed circumstance by its respective ____.
A. Weighted Average....Required rate of return
B. Required rate of return... beta coefficient
C. Weighted average... probability of occurring
D. Distribution curve...required rate of return
2. What is the accumulated sum of each of the following streams of payments?
a. $490 a year for 88 years compounded annually at 10 percent.
b. $104 a year for 66 years compounded annually at 77 percent.
c. $33 a year for 13 years compounded annually at 12 percent.
d. $26 a year for 66 years compounded annually at 55 percent.