1. What is the expected rate of return on a stock that has a beta of 1.51 if the market risk premium is 8.3 percent and the risk-free rate is 3.6 percent?
14.27 percent
12.12 percent
15.20 percent
16.13 percent
2. You own a $40,000 portfolio that is invested in a risk-free security and Stock A. The beta of Stock A is 2.00 and the portfolio beta is .80. What is the amount of the investment in Stock A?
$16,820
$13,360
$18,560
$16,000