week08_TutorialQuestions - SCHOOL OF BANKING AND FINANCE...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
FINS 1613 Tutorial Questions 1 SCHOOL OF BANKING AND FINANCE FINS1613 BUSINESS FINANCE Semester 2, 2010 TUTORIAL QUESTIONS Multiple-choice Questions 1. Which of these is the ‘risk premium’? a. The return required by an investor on a risky security over and above the dividend rate of return b. The return required by an investor on a risky security over and above the market rate of return c. The return required by an investor on a risky security over and above the risk-free rate of return d. The return required by an investor on a risky security over and above the rate of return on equity 2. What is the expected portfolio return given the following information? Asset Portfolio weight E(ri) A 0.1 15% B 0.3 17% C 0.4 25% D 0.2 20% a. 7.71% b. 9.23% c. 15.05% d. 19.24% e. 20.60% 3. An analyst has estimated how a particular stock’s return will vary. Economy Probability Return Recession 0.1 -23% Below average 0.1 - 8% Average 0.4 6% Above average 0.2 17% Boom 0.2 24%
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
FINS 1613 Tutorial Questions 2 What is the coefficient of variation of the company’s stock? (Use the population standard deviation, not the sample standard deviation when calculating the coefficient of variation.) a.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/09/2012 for the course FINS 1613 taught by Professor Drkhshim during the Three '10 term at University of New South Wales.

Page1 / 4

week08_TutorialQuestions - SCHOOL OF BANKING AND FINANCE...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online