Question 1
Vera Paper’s stock has a beta of 1.5, and its required return is 13.2%. Dell Dairy’s stock has a beta of 0.9. If the risk-free rate is 5.6%, what is the required rate of return on Dell’s stock?
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10.16%
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10.45%
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10.72%
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10.99%
Question 2
What happens to portfolios that cannot be dominated?
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They have low covariances.
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They haveminimumstandard deviations.
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They lie on the efficient frontier.
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They have maximum expected returns.