Author Question: Asset Expected Return Beta Stock A 9 0.9 Stock B 11 1.4 Risk-Free Asset 5 Consider the assets ... (Read 129 times)

frankwu · **on:** Jul 10, 2018

Asset Expected Return Beta
Stock A 9 0.9
Stock B 11 1.4
Risk-Free Asset 5

Consider the assets outlined in the table above. Which asset offers the best risk-return trade-off?

A) Stock A
B) Stock B
C) The risk-free asset
D) Either Stock A or Stock B as both have the same risk-return trade-off

Question 2

You have a 5-year amortized loan with a nominal rate of 11 and annual payments of 541.14. What is the original (time 0 ) principal of the loan?

A) 2,000.00
B) 2,705.70
C) 2,289.31
D) 1,678.86
E) 2,051.35