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Author Question: You are considering investing in Stock ABC. This stock has an expected return of 14, the risk free ... (Read 97 times)

Capo

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You are considering investing in Stock ABC. This stock has an expected return of 14, the risk free rate is 5, and the market risk premium (or Treynor Index) is 8. What is the beta of Stock ABC?
 
  A) 0.950
  B) 1.125
  C) 1.250
  D) 1.400
  E) 1.500

Question 2

Simpson Industries Inc. pays a 1.37 dividend every quarter and will maintain this policy forever. What price should you pay for one share of common stock if you want an annual return of 12.5 on your investment?
 
  A) 43.84
  B) 43.94
  C) 44.84
  D) 44.94


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jordangronback

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