1. The rate of return on the U.S. government treasury bill is 0.03 and the expected rate of return on the Wilshire 5000 is 0.10 . What is the required rate of return for a stock with a Beta 0.88?
2. An amount of $15,000 is due 31 months from now. If the interest rate is 7.4% compounded quarterly, what amount will settle the debt now? Assume that simple interest is paid for part of a period. Use the Banker’s rule when computing simple interest.
3. Green Thumb Inc. has a 0.0 probability of a return of 0.21, a 0.3 probability of a rate of return of 0.05, and the remaining probability of a -0.1 rate of return. What is the variance in the expected rate of return of Green Thumb Inc.?