1. The risk-free rate is 6%, and the expected market return is 15%.A stock with a beta of 1.2 is selling for $25 and will pay a $1 dividend at the end of the year. If the stock is priced at $30 at year-end, it is:
a. under-priced, so buy it
b. over-priced,so buy it
c. under-priced, so short it
d. over-priced,so short it
2. A manager who evaluates portfolios' investment performance adjusted for systematic risk is most likely to rank portfolio based on their
a. Correlation Coefficient
b. Sharpe's ratios
c. Treynor mearsures
d. R-squared