1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

Post-class Online Quiz 7

Due
Nov 6, 2022 at 11:30pm
Points
16
Questions
16
Available
Nov 5, 2022 at 8am - Nov 6, 2022 at 11:30pm
Time Limit
60 Minutes

This quiz was locked Nov 6, 2022 at 11:30pm.

Attempt History
Attempt Time Score
LATEST Attempt 1
11 minutes 16 out of 16

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Correct answers are no longer available.

Score for this quiz:

16 out of 16
Submitted Nov 5, 2022 at 9:27pm
This attempt took 11 minutes.

Question 1 1
/ 1 pts

Suppose you invest $32,750 by purchasing 300 shares of Abbott Labs

(ABT) at $60 per share, 250 shares of Lowes Companies, Inc. (LOW) at
$35 per share, and 120 shares of Ball Corporation (BLL) at $50 per
share. The weight on Abbott Labs in your portfolio is:

 
40.72%.

 
54.96%.

 
68.48%.

 
70.02%.

Question 2 1
/ 1 pts

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1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

Suppose you invest $18,000 in Merck stock and $32,000 in Home

Depot stock. You expect a return of 20% for Merck and 14% for Home
Depot. What is the expected return on your portfolio?

 
18.25%

 
16.16%

 
14.43%

 
13.07%

Question 3 1
/ 1 pts

Suppose that Google stock has a beta of 1.18 and Boeing stock has a
beta of 1.35. The beta on a portfolio that consists of 40% Google stock
and 60% Boeing stock is closest to:

 
1.15.

 
1.28.

 
1.32.

 
1.50.

Question 4 1
/ 1 pts

Suppose that Google stock has a beta of 1.12 and Boeing stock has a
beta of 1.36. If the risk-free interest rate is 3% and the expected return
from the market portfolio is 15%, then the expected return on a portfolio
that consists of 70% Google stock and 30% Boeing stock is closest to:

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1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

 
15.6%.

 
16.5%.

 
17.3%.

 
18.8%.

Question 5 1
/ 1 pts

The volatility of the market portfolio is 10%, the expected return on the market
is 12%, and the risk-free rate of interest is 4%.

The beta for Taggart Transcontinental is closest to:

 
0.80.

 
1.12.

 
1.22.

 
1.36.

Question 6 1
/ 1 pts

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1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

The volatility of the market portfolio is 13%, the expected return on the market
is 12%, and the risk-free rate of interest is 4%.

The beta for Wyatt Oil is closest to:

 
1.22.

 
1.10.

 
0.95.

 
0.83.

Question 7 1
/ 1 pts

The volatility of the market portfolio is 13%, the expected return on the market
is 12%, and the risk-free rate of interest is 3%.

The expected return for Wyatt Oil is closest to:

 
12.9%.

 
15.4%.

 
17.2%.

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20.5%.

Question 8 1
/ 1 pts

The volatility of the market portfolio is 10%, the expected return on the market
is 12%, and the risk-free rate of interest is 4%.

The expected return for Rearden Metal is closest to:

 
5.8%.

 
8.2%.

 
11.4%.

 
15.6%.

Question 9 1
/ 1 pts

The volatility of the market portfolio is 8%, the expected return on the market
is 15%, and the risk-free rate of interest is 3%.

The beta for the market is closest to:

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1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

 
1.20.

 
1.00.

 
0.80.

 
0.60.

Question 10 1
/ 1 pts

The volatility of the market portfolio is 13%, the expected return on the market
is 12%, and the risk-free rate of interest is 4%.

The beta for the portfolio of the three stocks is closest to:

 
1.15.

 
0.88.

 
0.71.

 
0.62.

Question 11 1
/ 1 pts

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1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

The volatility of the market portfolio is 10%, the expected return on the market
is 12%, and the risk-free rate of interest is 4%.

The expected return on the portfolio of the three stocks is closest to:

 
10.0%.

 
11.7%.

 
12.8%.

 
13.5%.

Question 12 1
/ 1 pts

The volatility of the market portfolio is 8%, the expected return on the market
is 15%, and the risk-free rate of interest is 3%.

The Sharpe Ratio for Rearden Metal is closest to:

 
0.60.

 
0.54.

 
0.42.

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0.35.

Question 13 1
/ 1 pts

The volatility of the market portfolio is 10%, the expected return on the market
is 12%, and the risk-free rate of interest is 4%.

The Sharpe Ratio for Wyatt Oil is closest to:

 
0.35.

 
0.44.

 
0.52.

 
0.78.

Question 14 1
/ 1 pts

Which of the following statements is FALSE?

 
The covariance and correlation allow us to measure the co-movement of
returns.

 
Correlation is the expected product of the deviations of two returns.

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1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

 
Because the prices of the stocks do not move identically, some of the
risk is averaged out in a portfolio.

 
The amount of risk that is eliminated in a portfolio depends on the
degree to which the stocks face common risks and their prices move
together.

Question 15 1
/ 1 pts

Which of the following statements is FALSE?

 
We say a portfolio is an efficient portfolio whenever it is possible to find
another portfolio that is better in terms of both expected return and
volatility.

 
We can rule out inefficient portfolios because they represent inferior
investment choices.

 
The volatility of the portfolio will differ, depending on the correlation
between the securities in the portfolio.

 
Correlation has no effect on the expected return of a portfolio.

Question 16 1
/ 1 pts

Which of the following statements is FALSE?

 
A stock's return is perfectly positively correlated with itself.

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1/3/23, 9:45 PM Post-class Online Quiz 7: Corporate Finance-T322WSB-5

 
When the covariance equals 0, the stocks have no tendency to move
either together or in opposition of one another.

 
The closer the correlation is to -1, the more the returns tend to move in
opposite directions.

 
The variance of a portfolio depends only on the variance of the
individual stocks.

Quiz Score:
16 out of 16

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