Multiple Choice Question about Required Rate of Return

Consider the following information and then calculate the required rate of return for the Scientific Investment Fund, which holds 4 stocks. The market's required rate of return is 15.0%, the risk-free rate is 7.0%, and the Fund's assets are as follows:
Stock

Stock Investment Beta
A $200,000 1.50
B 300,000 -0.50
C 500,000 1.25
D 1,000,000 0.75

a. 10.67%

b. 11.23%

c. 11.82%

d. 12.45%

e. 13.10%

Solution Summary

Solution shows how to estimate the required rate of return with calculations displayed clearly.

In a capital budgeting decision if a firm uses the net present value method and a 12% discount rate what does a negative net present value indicate:
a. the proposals rate of return exceeds 12%
b. the proposals rate of return is less then the minimum raterequired
c. the proposal earns a rate of return between 10-12%
d. non

I need help figuring out what formulas to use so that I can understand how to compute the rate of return on the following questions. Please help with these multiplechoicequestions.
What is the rate of return for an investor who pays $1,054.47 for a three-year bond with a 7% coupon and sells the bond one year later for $1,03

A portfolio manager has a $10 million portfolio, which consists of $1 million invested in 10 separate stocks. The portfolio beta is 1.2. The risk-free rate is 5% and the market risk premium is 6%.
____ 6. What is the portfolio's requiredreturn?
a. 9.85%
b. 12.00%
c. 12.20%
d. 12.35%
e. 6.20%
____ 7. The

42. If the expected rate of return on a stock exceeds the requiredrate
1. The stock is experiencing supernormal growth
2. The stock shoudl be sold
3. The company is probably not trying to maximize price per share
4. The stock is a good buy
5. Dividends are not being declared
(Pick the best answer)

Stock C has a beta of 1.2, while Stock D has a beta of 1.6. Assume that the stock market is efficient. Which of the following statements is most correct?
a. The requiredrates of return of the two stocks should be the same.
b. The expected rates of return of the two stocks should be the same.
c. Each stock should have a r

The net present value of a project is zero. The minimum desired rate of return used to obtain the net present value is 8%. Which of the following statements is TRUE?
Answer
A. The project is desirable if the minimum desired rate of return is 10%.
B. The project is desirable if the minimum desired rate of return is 6%.

MultipleChoiceQuestions:
1. XYZ Inc.'s stock has a 50% chance of producing a 30% return, a 25% chance of producing a 9% return, and a 25% chance of producing a -25% return. What is XYZ's expected return?
A. 14.4%
B. 15.2%
C. 16.0%
D. 16.8%
E. 17.6%
2. An investor has a 2-stock portfolio with $50,000 invested in S

Which of the following may affect the value of the rate constant?
a. catalysts
b. concentrations of reactants
c. temperature
d. answers b and c
e. answers a, b, and c

Exaplain why you would change your nominal requiredrate of returne if you expected the rate of inflation to go from 0 (NO INFLATION) to 4 percent. Give an example if what would happen if you didn't change your requiredrate of return under these conditions.