Please answer questions (1) ~ (6) in the textbox below. Consider the following information on Stocks I and II: midterm q17.PNG The market risk premium is 12 percent and the risk-free rate is 6 percent.  (1) What is the beta of stock I? (4pts) a. 0.78, b. 1.07, c. 1.53, d. 1.64, e. 1.89 (2) What is the beta of stock II? (4pts) a. 0.20, b. 0.52, c. 1.15, d. 1.42, e. 1.60 (3) What is the standard deviation of stock I? (4pts) a. 7.37%, b. 14.46%, c. 20.99%, d. 24.22%, e. 27.34% (4) What is the standard deviation of stock II? (4pts) a. 7.37%, b. 14.46%, c. 20.99%, d. 24.22%, e. 27.34% (5) Which one has the most unsystematic risk? Stock I or Stock II? (2pts) a. Stock I, b. Stock II (6) Which stock is “riskier”? Stock I or Stock II? (2pts) a. Stock I, b. Stock II

When investors allocate their money between risk-free asset and tangency portfolio, the allocation to tangency portfolio:

The slope of the security market line is equal to the:

A $1,000 face value bond has a 9.0% annual coupon and pays interest semiannually. The bond matures in 2 years and has a yield to maturity of 6.5%. What is the Macaulay duration?

DIANA:   Hola, tardes. ¿Cómo llamas?   TONI:   Hola, me Toni, ¿y tú? DIANA:   Diana. ¿De eres?   TONI:    de México. ¿Y tú? DIANA:   De los Estados Unidos. Oye (hey), ¿ hora es?   TONI:   Es una de la tarde. DIANA:   Gracias.   TONI:   De . vemos en clase. DIANA:   Sí, hasta .

Madrid la capital de España.

–Hola, Reyes.  ¿Qué hora es? –Hola, Soledad. (It’s 1:30 p.m.)

How many suitcases are on the bus?

¿Hay un pasajero? No, hay cuatro .

¿Quién (tú)?